Employee Engagement -
Yes, it’s a buzzword, but “employee engagement” must secure a permanent spot in the vernacular of the independent insurance channel.
Among U.S. industries in general, disengaged employees cost an estimated $483 billion to $605 billion each year in lost productivity, according to data collected from over 31 million respondents for Gallup’s 2017 biennial State of the American workplace study. As revealed by that study, only 33% of U.S. workers are engaged.
Meanwhile, the independent insurance channel is in the midst of a talent crisis as it attempts to cope with a rapidly changing digital landscape, and this year LinkedIn reports that, among its half-a-billion professionals, the insurance industry shows an annual turnover rate of 10.8%. Consultant and research firm Deloitte says that for insurance firms, "a robust engagement strategy is vital to retaining competitive advantage in an increasingly complex marketplace."
Don’t confuse “engagement” with “satisfaction.” Employee satisfaction is important, but it’s just one of many factors contributing to employee engagement. In fact, unhappy workers can perform just as well as their contented counterparts. It’s important to understand that while one person might find satisfaction by completing a minimum of work tasks, another might require challenging projects to feel satisfied in a job. Standardized job expectations can produce vastly different satisfaction levels among employees.
What is “employee engagement”? There is no universal definition, but in general, employee engagement is the level of passion and emotional commitment an individual brings to the job. Highly engaged employees feel valued by their employer and therefore are loyal and invested in the firm’s success. They are motivated to bring their best selves to their work, incentivized in large part by the opportunities and recognition offered by their employer. They are proactive and involved.
The Gallup study also shows that highly engaged employees are more effective brand ambassadors. First, they identify with and promote the company’s mission and values, finding purpose in their work. Second, they increase sales and profitability by building strong relationships with customers, precisely because they advocate on behalf of a company they believe in and support.
Priceless employees. The value of highly engaged employees becomes evident when they consistently outperform their disengaged peers. Their retention reduces turnover rates and costs, resulting in a healthier bottom line. This is especially true for the independent channel, for which retention already is a key issue. For example, when a producer leaves an agency, the agency must bear not only the cost of finding and training a replacement, but then must wait an average of three years for that producer to “validate,” or to start showing a profit for the firm.
A challenged industry. Maintaining employee engagement has proved to be difficult for insurance employers, says the Korn Ferry Institute, which collected engagement data from more than 68,000 respondents in the insurance industry and from more than 6.8 million employees in a global norm group.
Insurance industry respondents to the 2017 Korn Ferry survey rated their firms as less innovative and as having poorer cooperation among company departments, when compared to global norms. In addition, insurance industry respondents reported “significant negative changes” when assessing their own firms against four statements descriptive of firms that earn high employee engagement:
· “The company is effectively managed and well-run.
· “The company provides a high-quality customer experience.
· “I believe my pay is fair considering the pay of people doing similar work in other companies.
· “There is a clear link between my performance and my compensation.”
In sum, foundations matter. Your employees are the cornerstone of your organization; without them your agency cannot flourish. Invest in an employee engagement strategy to capitalize on the potential already at your disposal.
Your employees will thank you. Your customers will thank you. And your annual report will be brighter.
(Stay tuned for our next blog about how to actively engage employees.)