EMPLOYEE ENGAGEMENT BENCHMARK STUDY, 2017

Transcription

1 EMPLOYEE ENGAGEMENT BENCHMARK STUDY, 2017 ANNUAL STUDY EXAMINES 5,000+ U.S. EMPLOYEES By Bruce Temkin, CCXP Customer Experience Transformist & Managing Partner Aimee Lucas, CCXP Customer Experience Transformist & Vice President March 2017 TEMKIN GROUP 617/ TEMKINGROUP.COM

2 Executive Summary For the sixth year in a row, Temkin Group used the Temkin Employee Engagement Index to analyze the engagement levels of more than 5,000 U.S. employees. We found that:! Sixty- three percent of U.S. employees are highly or moderately engaged the highest level we ve seen in the six years we ve conducted this study.! Companies that outperform their competitors in both financial results and customer experience have more engaged workers.! Compared to disengaged employees, highly engaged employees are almost five times more likely to recommend the company s products and services, they are over four times more likely to do something that is good, yet unexpected, for the company, they are three times more likely to stay late at work if something need to be done, and they are over five times more likely to recommend an improvement at the company.! Companies with 501 to 1,000 employees have the highest percentage of engaged employees, while companies with 10,000 or more employees have the lowest.! On an individual level, our research shows that the most highly engaged employees tend to be those who regularly interact with customers, who are highly educated, who earn a high income, and who are executives.! Given the significant value of engaged employees, we recommend that companies improve engagement levels by mastering our Five I s of Employee Engagement: Inform, Inspire, Instruct, Involve, and Incent. Employee Engagement Is On The Rise Temkin Group has published its employee engagement benchmark which examines the level of engagement in the U.S. workforce every year for the past six years. These measurements are important because employee engagement is a critical component of a customer- centric culture; hence why it s one of the Four Customer Experience Core Competencies. 1 In previous research, Temkin Group identified a set of employee attitudes that strongly correlate to engaged, productive employees. 2 We used these attitudes to develop the Temkin Employee Engagement Index (TEEI), which is calculated by the degree to which employees agreed with the following three statements (see Figure 1):! I understand the overall mission of my company! My company asks for my feedback and acts upon my input! My company provides me with the training and the tools that I need to be successful To understand the current state of employee engagement, we surveyed 5,626 U.S. employees who work at for- profit organizations and compared the results to our previous five employee engagement benchmark studies. 3 We found that: 1 See Temkin Group Insight Report, The Four Customer Experience Core Competencies (January 2013). 2 See Temkin Group Insight Report, Employee Engagement Benchmark Study, 2013 (January 2013). 3 We surveyed U.S. consumers who were full- time employees during Q Page 2

3 ! Employee engagement levels jumped in the past year. The percentage of respondents who report feeling either moderately or highly engaged increased sharply over the past year, going from 57% in 2016 to 63% this year (see Figure 1). Sixty- three percent is also the highest level of engagement we ve seen in the six years of conducting this study.! Better performing companies have more engaged employees. Eighty- two percent of employees at companies with strong financial results are highly or moderately engaged, as opposed to only 68% at under- performing companies (see Figure 2).! Highly engaged employees are more productive. Engaged employees demonstrate a higher commitment to their work across an array of different activities. Compared to disengaged employees, highly engaged employees are almost five times more likely to recommend the company s products and services, they are over four times more likely to do something that is good, yet unexpected, for the company, they are three times more likely to stay late at work if something need to be done, and they are over five times more likely to recommend an improvement at the company. They are also almost nine times more likely to recommend that a friend apply for a job within their company.! Engaged employees try harder. Sixty- eight percent of highly engaged employees always or almost always try their hardest at work, as opposed to only of disengaged employees (see Figure 3).! Customer experience leaders have more engaged employees. Seventy- nine percent of employees who work at companies with significantly above average customer experience in their industry are highly or moderately engaged, compared with only 49% at companies with average or below average customer experience (see Figure 4). This means that employees working for CX leaders are more committed to their jobs.! Construction has the highest percentage of engaged employees. We examined the level of employee engagement across 15 industries and found that 81% of employees working in the construction sector are highly or moderately engaged, whereas only 54% of employees in the public administration sector feel the same (see Figure 5). Compared with last year, engagement levels in the construction sector increased the most (11 percentage- points), while levels in the retail sector declined the most (two percentage- points) (See Figure 6).! Employees are least engaged at large companies. Only of the employees who work at companies with more than 10,000 people report feeling moderately or highly engaged the lowest level of any company size (see Figure 7). At the other end of the spectrum, 70% of employees who work at companies with 501 to 1,000 employees report feeling moderately or highly engaged. All sizes of companies have higher levels of employee engagement this year than they did last year. Which Employees Are Most Engaged? We examined how different employee characteristics affect engagement levels, and we found that engaged employees are more likely to be:! Interacting with customers. The most engaged employees are those who often interact with customers, followed by the ones who always interact with customers (see Figure 8). Page 3

4 ! Executives. Eighty- six percent of executives are at least moderately engaged, compared with only 49% of individual contributors (see Figure 9).! 25- to 44-year-olds. We examined employee engagement in different age groups and found much higher levels of engagement in employees between the ages of 25 and 44 (see Figure 10). Once again, we ve found that the least engaged group is 45- to 54- year- olds.! High-income earners. Engagement levels increase as income increases (see Figure 11). At the high- end, 72% of employees earning more than $75,000 are at least moderately engaged, while only 43% of employees who earn less than $25,000 feel equally as engaged. Over the past year, the level of engagement increased the most with high- income employees.! Highly educated. Seventy- three percent of employees with a post- graduate degree are moderately or highly engaged, as opposed to only of those with just a high school degree (see Figure 12). Since last year, the engagement levels increased the most in workers with a post- graduate education, going up 12 percentage- points. Master the Five I s of Employee Engagement Although engagement levels are increasing, there s still considerable room for improvement. Using Temkin Group s Employee Engagement Competency & Maturity Assessment, we found that only 12% of large organizations have engagement efforts that fall into the top two levels of maturity (see Figure 13). 4 To improve your company s employee engagement, we recommend building five competencies that we call the Five I s of Employee Engagement: 5! Inform: Provide employees with the information they need to understand the organization s vision and brand values, along with evidence of how customers feel about the organization.! Inspire: Connect employees to the organization s vision and values, instilling within them a belief that these matter, and encouraging them to take pride in their job and their organization.! Instruct: Support employees with the training, coaching, and feedback they need to successfully deliver the organization s brand promises to customers.! Involve: Take action with employees when designing their jobs, improving work processes, and solving the problems identified through customer or employee feedback.! Incent: Deploy appropriate systems to measure, reward, and reinforce desired employee behaviors, while motivating employees to give their best. 4 See Temkin Group Insight Report, Employee Engagement Competency & Maturity, 2015 (July 2016) 5 See Temkin Group Insight Report, The Five I s of Employee Engagement (November 2012) Page 4

5 Temkin Employee Engagement Index (TEEI) (1) Completely disagree (2) (3) (4) Neutral (5) (6) (7) Completely agree I understand the overall mission of my company My company asks for my feedback and acts upon my input My company provides me with the training and the tools that I need to be successful Total score defines level of employee engagement: 19 to 21 Highly engaged 16 to 18 Moderately engaged 13 to 15 Slightly engaged 12 or less Disengaged Total Highly engaged Moderately engaged Slightly engaged Disengaged TEEI Results, 2011 to % 28% 28% 29% 29% 20% 23% 37% 17% 17% Base: Full-time U.S. employees: 5,626 in 2016, 5,552 in 2015, 5,617 in 2014, 5,317 in 2013, 2,456 in 2012, 2,435 in 2011 Source: Temkin Group Q3 2016, Q3 2015, Q3 2014, Q3 2013, Q3 2012, and Q Consumer Benchmark Studies Figure 1 Page 5

6 Engaged Employees Are Valuable Assets Employee engagement based on financial performance Financial performance is worse than competitors Financial performance is significantly better than competitors 32% Highly/ moderately engaged employees 68% Less engaged employees 82% Employees That Are Likely or Very Likely to Do These Things Recommend your company s products and services to someone who might need them 88% Stay late at work if something needs to be done after your normal workday ends 28% 85% Do something that is good for your company even if it is not expected of you 84% Highly engaged employees Make a recommendation about an improvement that can be made in your company 13% 67% Disengaged employees Recommend that a friend or relative apply for a job within your company 8% 70% Base: 5,626 full-time U.S. employees Source: Temkin Group Q Consumer Benchmark Studies Figure 2 Page 6

7 Engaged Employees Try Harder When you are at work, how often do you try your hardest to do a good job for the company? 43% Highly engaged employees Moderately engaged employees 29% Always Almost always Usually 16% Sometimes Slightly engaged employees 13% 23% Never or almost never Disengaged employees 14% 16% Base: 5,626 full-time U.S. employees Source: Temkin Group Q Consumer Benchmark Studies Figure 3 Page 7

8 Customer Experience Leaders Have More Engaged Employees Employee engagement based on customer experience (CX) performance CX about the same or worse than competitors CX significantly better than competitors 51% 49% Highly/ moderately engaged employees Less engaged employees 79% Employees Likely To Do These Things Based on Company s CX Level Recommend your company s products and services to someone who might need them 46% 74% Stay late at work if something needs to be done after your normal workday ends 52% 71% Do something that is good for your company even if it is not expected of you 45% 66% CX is significantly better than competitors Recommend that a friend or relative apply for a job within your company Make a recommendation about an improvement that can be made in your company 54% 39% 46% 40% CX is about the same or worse than competitors Base: 5,626 full-time U.S. employees Source: Temkin Group Q Consumer Benchmark Studies Figure 4 Page 8

9 Temkin Employee Engagement Index By Industry Highly engaged Moderately engaged Slightly engaged Disengaged Construction 49% 32% 12% 6% Management of Companies, Support, Waste Management & Remediation 41% 15% 14% Professional, Scientific and Technical Services 39% 10% Wholesale Trade 37% 29% 14% 20% Manufacturing 33% 15% Information 35% 12% Finance and Insurance 14% Accommodations and Food Services 28% 16% Arts, Entertainment and Recreation 29% 19% Health Care and Social Assistance 28% Other Services (Except Public Administration) 29% Educational Services 28% 23% 19% Retail Trade 23% Transportation and Warehousing 23% 32% Public Administration 20% Base: 5,626 full-time U.S. employees Source: Temkin Group Q Consumer Benchmark Studies Figure 5 Page 9

10 Temkin Employee Engagement Index By Industry (2014 to 2016) Highly and moderately engaged employees Construction Management of Companies, Support, Waste Management & Remediation Professional, Scientific and Technical Services Manufacturing Information Finance and Insurance Wholesale Trade Arts, Entertainment and Recreation Accommodations and Food Services Educational Services Health Care and Social Assistance Transportation and Warehousing Other Services (Except Public Administration) Public Administration Retail Trade 67% 56% 57% 66% 55% 62% 66% 52% 61% 58% 57% 47% 55% 58% 54% 58% 57% 57% 55% 51% 49% 55% 50% 54% 50% 51% 49% 82% 71% 70% 71% 70% 62% 62% 66% 65% 62% Base: Full-time U.S. employees: 5,626 in 2016, 5,552 in 2015, and 5,617 in 2014 Source: Temkin Group Q3 2016, Q3 2015, and Q Consumer Benchmark Studies Figure 6 Page 10

11 Temkin Employee Engagement Index (TEEI) By Size of Company TEEI by size of company Highly engaged Moderately engaged Slightly engaged Disengaged More than 10,000 employees 23% 5,001 to 10,000 employees 23% 1,001 to 5,000 employees 23% 17% 501 to 1,000 employees 37% 32% 13% 101 to 500 employees 33% 32% 19% 16% 51 to 100 employees 33% 19% 14% 10 to 50 employees 35% 19% 15% Less than 10 employees 36% 20% Moderately or Highly Engaged Employees By Size of Company, 2014 to 2016 More than 5,000 employees 1,001 to 5,000 employees 501 to 1,000 employees 101 to 500 employees 51 to 100 employees 10 to 50 employees Less than 10 employees 50% 69% 61% 62% 65% 58% 67% 60% 66% 56% 60% 57% 60% Base: Full-time U.S. employees: 5,626 in 2016, 5,552 in 2015, and 5,617 in 2014 Source: Temkin Group Q3 2016, Q3 2015, and Q Consumer Benchmark Studies Figure 7 Page 11

12 Temkin Employee Engagement Index (TEEI) By Amount of Customer Contact and Role Within Organization TEEI by how often employees interact directly with customers Highly engaged Moderately engaged Slightly engaged Disengaged Always 39% 17% Often 36% 12% Sometimes 33% 16% Never 32% Highly and moderately engaged employees based on how often they interact with customers, 2014 to 2016 Always 66% 60% 61% Often Sometimes 70% 63% 61% 60% 54% 55% Never 43% 42% 44% Base: Full-time U.S. employees: 5,626 in 2016, 5,552 in 2015, and 5,617 in 2014 Source: Temkin Group Q3 2016, Q3 2015, and Q Consumer Benchmark Studies Figure 8 Page 12

13 Temkin Employee Engagement Index (TEEI) By Organizational Role TEEI by organizational role of employee Highly engaged Moderately engaged Slightly engaged Disengaged Senior executive of the company 60% 10% 4% Manager of multiple departments or organizations 49% 11% 6% Manager of a department or organization 38% 35% 15% 12% Team leader/manager 35% 20% 12% Individual contributor Highly and moderately engaged employees based on organizational role, 2014 to 2016 Senior executive of the company Manager of multiple departments or organizations Manager of a department or organization Team leader/manager Individual contributor 86% 82% 74% 83% 78% 76% 74% 67% 68% 69% 63% 64% 49% 45% 48% Base: Full-time U.S. employees: 5,626 in 2016, 5,552 in 2015, and 5,617 in 2014 Source: Temkin Group Q3 2016, Q3 2015, and Q Consumer Benchmark Studies Figure 9 Page 13

14 Temkin Employee Engagement Index (TEEI) By Age TEEI by age Highly engaged Moderately engaged Slightly engaged Disengaged 65 and older 19% 55 to 64 29% 20% 45 to 54 28% 35 to 44 38% 17% 14% 25 to 34 35% 33% 19% 13% 18 to 24 20% 20% Highly and moderately engaged employees based on age, 2014 to and older 55 to to to to to 24 Base: Full-time U.S. employees: 5,626 in 2016, 5,552 in 2015, and 5,617 in 2014 Source: Temkin Group Q3 2016, Q3 2015, and Q Consumer Benchmark Studies 57% 56% 56% 55% 56% 51% 60% 60% 55% 70% 68% 62% 61% Figure 10 Page 14

15 Temkin Employee Engagement Index (TEEI) By Income Level TEEI by income level Highly engaged Moderately engaged Slightly engaged Disengaged $100,000 to $149,999 $75,000 to $99,999 $50,000 to $74,999 $30,000 to $49,999 $25,000 to $29,999 Less than $25,000 40% 38% 33% 29% 33% 17% 10% 17% 12% 20% 17% 23% 23% 23% Highly and moderately engaged employees based on income, 2014 to 2016 More than $100,000 $75,000 to less than $100,000 $50,000 to less than $75,000 $25,000 to less than $50,000 Less than $25,000 72% 62% 63% 72% 62% 58% 63% 60% 57% 51% 55% 43% 40% 50% Base: Full-time U.S. employees: 5,626 in 2016, 5,552 in 2015, and 5,617 in 2014 Source: Temkin Group Q3 2016, Q3 2015, and Q Consumer Benchmark Studies Figure 11 Page 15

16 Temkin Employee Engagement Index (TEEI) By Education Level TEEI by educational level Highly engaged Moderately engaged Slightly engaged Disengaged Post-graduate degree 40% 33% 17% 10% Some postgraduate courses Undergraduate college/ university degree Some undergraduate college/ university High school degree 36% 28% 17% 13% 17% Highly and moderately engaged employees based on educational level, 2014 to 2016 Post-graduate degree 61% 58% 73% Undergraduate degree High school degree 64% 58% 56% 56% Base: Full-time U.S. employees: 5,626 in 2016, 5,552 in 2015, and 5,617 in 2014 Source: Temkin Group Q3 2016, Q3 2015, and Q Consumer Benchmark Studies Figure 12 Page 16

17 Results From Employee Engagement Competency Assessment Maturity Levels of Employee Engagement Efforts Level 5: Maximizing 1% Level 4: Enhancing 11% Level 3: Maintaining Level 2: Neglecting Level 1: Damaging Competency Levels Across Five I s of Employee Engagement Strong Moderate Weak Very Weak Inspire 13% 39% Instruct 14% 39% Involve 4% 38% 36% Incent 7% 15% 35% 42% Inform 0% 5% 29% 66% Base: 155 companies with 1,000 or more employees Source: Temkin Group Q CX Management Survey Figure 13 Page 17

18 About the Authors Bruce Temkin, CCXP is a Customer Experience Transformist & the Managing Partner of Temkin Group. He is also the co- founder and Emeritus Chair of the Customer Experience Professionals Association (cxpa.org). Bruce is widely viewed as a visionary in the customer experience field. He has worked with hundreds of large organizations on the strategies, processes, leadership, and culture required for sustaining superior customer relations. Bruce is the author of the blog Customer Experience Matters, one of the world s most popular sources of insights on customer experience, leadership, branding, and corporate culture. 6 His research focuses on identifying current and emerging best practices. He has published several seminal reports, including The ROI of Customer Experience, The Future of Customer Experience, and The Four Customer Experience Core Competencies. He uses insights from his pioneering research to advise companies on their customer experience journeys, identifying opportunities for a sustainable breakthrough performance. Prior to forming Temkin Group, Bruce served as Vice President & Principle Analyst at Forrester Research, where he led the company's B2B, financial services, and customer experience practices. Bruce was Forrester s most- read analyst for 13 consecutive quarters, and while there, he created both Forrester s Customer Experience Index and its Voice of the Customer Award. Before joining Forrester, Bruce co- founded and led several Internet start- ups. He also held management positions at GE, Stratus Computers, and Fidelity Investments Bruce has been widely quoted in the press and is a highly in- demand public speaker, combining his deep area expertise with an engaging, entertaining style. Bruce is a Certified Customer Experience Professional. He has a bachelors degree in Mechanical Engineering from Union College and a Master s in Management from MIT Sloan School. Aimee Lucas, CCXP is a Customer Experience Transformist & Vice President at Temkin Group. She has over 16 years of experience helping companies improve their service delivery and transform their customer experience through people development and process improvement initiatives. Her areas of expertise include market research, program management, marketing, instructional design, and training. Prior to joining Temkin Group, Aimee implemented the client experience strategy and managed the voice of the customer (VoC) program at one of the top 10 public accounting and consulting firms in the country. Her work included planning and managing strategic initiatives and collaborating with cross- functional teams to introduce new- to- company functions and improvements. Aimee also started the firm s internal market research function, managed the design and implementation of its sales and relationship management process, and delivered instructional design and training services across the organization. Aimee is a Certified Customer Experience Professional. She graduated from the University of Notre Dame with a bachelor s degree in marketing management. In her free time, she volunteers as a marathon coach for the Leukemia and Lymphoma Society s Team in Training program. 6 Customer Experience Matters is a registered trademark of Temkin Group Page 18

19 TEMKIN GROUP OVERVIEW Temkin Group is a leading customer experience (CX) research, consulting, and training firm. We help many of the world s largest brands lead their transformational journeys towards customer- centricity and build loyalty by engaging the hearts and minds of their customers, employees, and partners. TEMKIN GROUP WAS FOUNDED BASED ON FOUR BELIEFS 1. Customer Experience Drives Loyalty: Our research and work with clients has shown that interactions with customers influence how much business they will do with you in the future and how often they will recommend you. 2. Improvement Requires Systemic Change: Companies can improve customer interactions in isolated areas, but they don t develop competitive advantage until customer experience is embedded in their operating fabric. 3. It s a Journey, Not a Project: Building the capabilities to consistently delight customers doesn t happen overnight. Companies need to plan for a multi- year organizational change program. 4. We Can Help You Make A Difference: Transformation isn t easy, but becoming more customer- centric is worth the effort. We are committed to helping our clients accelerate their results and avoid many of the obstacles along the way. HOW WE ARE DIFFERENT Temkin Group is focused on sustainable success. We combine research- based thought leadership with a deep understanding of human behavior and organizational dynamics to help companies build four customer experience core competencies: Our team combines CX thought leadership with a deep understanding of the dynamics of organizations to accelerate results. Rather than layering on cosmetic changes, we help companies embed practices within their culture and operating processes. Temkin Group 48 White Oak Road Waban, MA / (tel) 617/ (fax) info@temkingroup.com HOW WE CAN HELP Temkin Group offers a number of different services including:! Research & Advisory Subscriptions: Access all of our research on trends, best practices, and benchmarks, and receive advice and answers to your questions.! Training and workshops: We can deliver customized training for executives, customer experience professionals, advocates, and other employees.! Speeches and webinars: Temkin Group can deliver a highly engaging and entertaining speech about leading- edge customer experience topics for just about any event or offsite.! Consulting services: We can assess your efforts and identify opportunities for you to accelerate results and avoid pitfalls along the way. We can help in discrete strategy sessions or with a more ongoing, coaching relationship. Temkin Group. All rights reserved.