Over the last couple of decades, best practices around employee engagement have evolved considerably. As workforce mobility picked up in the late 1990s, employers came to realize that simply recognizing employees—the proverbial gold watch for reaching a milestone —was no longer enough. So began the next iteration of engagement: flexible work hours, open office plans, volunteer initiatives and other benefits designed to give employees a warm and fuzzy feeling about going to work.
Today, engagement is all of that and more. While employers still see the importance of nurturing a happy workforce, the next chapter of engagement is, in a word, about empowerment. It’s about making employees feel like their work matters, and helping employers understand what impact their engagement efforts are having, not just on employee sentiment but the bottom line.
To be sure, this was a prominent theme at this year’s Human Capital Institute Employee Engagement conference. At a roundtable hosted by Harbor View Advisors, senior executives discussed some of the biggest challenges, changes and opportunities in this space. Here are some of the key points that came out of the conversation.
#1 The Workforce Is Increasingly Diverse
Never has the U.S. workforce ever been so diverse. This is true not just in terms of race, religion, gender and ethnicity but also age and experience. At many organizations, teams may span three or four generations. While this has the potential to create a rich and vibrant work environment, it can pose challenges for employers trying to determine how best to engage their employees. What works for a millennial may not resonate with a baby boomer, and vice versa. Consequently, employers not only need to weigh many different solutions, the need to keep closer tabs on what is and is not working, and with whom.
#2 Solutions are also Increasingly Diverse
The importance of engagement – and the challenge of speaking to a multifaceted workforce – have not been lost on entrepreneurs. Between 2008 and 2017, the number of engagement companies seeking funding increased nearly nine-fold. Meanwhile, technology has expanded the realm of what’s possible. Today’s solutions run the gamut from wellness monitoring and social recognition, to pulse surveys and gamification.
Although a crowded marketplace may pose challenges for specialized providers, APIs may hold the answer. By making it easy for customers to integrate engagement data with existing human capital platforms, niche players can compete with larger entities.
#3 Tangible Outcomes are Key
It’s no longer enough to show that engagement efforts improve employee sentiment. Rather, the next chapter of engagement calls for demonstrating that better engagement leads to better business outcomes, such as increased sales, productivity, cost savings or customer satisfaction. (This Harvard Business Review report on the impact of employee engagement on performance helps make the connection.)
Providers looking to show this correlation cannot rely solely on academic studies talking about engagement generically. They need to be able to link their offerings to key performance indicators directly. Again, this is where APIs that integrate specialized tools with broader company metrics are essential.
#4 Time to Retool Messaging
The nature of engagement is rapidly changing, making it possible for companies to think far more proactively about how they manage and incentivize what is likely their most important resource. That is, engagement is no longer a “nice to have” or even a necessary cost to recruit and retain talent. When done right, it can have a direct impact on an organization’s core business.
Engagement providers most likely to make inroads with new clients are those who understand how to position their offerings not as a cost of human resources but as an investment in the business.
About Harbor View Advisors
Harbor View Advisors provides M&A advisory, turnkey corporate development and strategic consulting to software and technology-enabled business services companies. Our unique approach combines the strategic thinking of a consulting firm with the execution experience of an investment bank to provide clients with the full spectrum of guidance they need to achieve their goals. Whether you are seeking a path to liquidity for your business or are looking to strengthen your corporate development program, we work with your leadership team to solve your toughest challenges.