High Growth Firms Have Greater Employee Engagement

May 18, 2004 (PLANSPONSOR.com) - Companies with double-digit growth have employee engagement levels 20% higher then their lower-growth peers.

Higher levels of employee engagement – the state in which employees are emotionally and intellectually committed to an organization or group – was attributed to double-digit growth companies – those firms with five-year compound average revenue growth of 10% or more – for reasons such as a higher level of employee connectedness to the company and more engaged supervisors. Hewitt Associates, the human resources outsourcing and consulting firm that conducted the survey, also found better employee engagement may precede better business results.

“High engagement at high-growth companies can be viewed as a chicken-or-egg issue, with some arguing that strong financial performance drives greater engagement,” noted Ray Baumruk, Talent and Engagement Practice Leader, Hewitt Associates. “However, our research shows evidence that greater engagement in many cases actually precedes better business results. High-growth companies communicate more, use more employee feedback, provide greater clarity of career path and direction and have more visible leaders. These actions have as much impact on engagement as financial growth and return.”

Quantifying results of the survey, Hewitt found managers and supervisors are generally 25% more engaged than other employee groups. However, the engagement scores of leaders in double-digit growth firms are 33% higher than for other employees. This means that leaders are enthusiastic in expressing their confidence in the company and its success and more likely to pass that confidence on to employees, Hewitt said.

Employees then benefits from a sort of trickle-down effect as employees at high-growth companies are more connected to the business, its performance and its leadership. Hewitt found employees at double-digit growth companies are 18% more likely to say that they have a clear understanding of their role in corporate success and 17% more likely to have a good understanding of their company’s goals. Further, they are 12% more likely to feel that they have the information and empowerment to do their jobs and 13% more likely to trust senior leaders.

Greater trust in senior leaders might also come from improved communication demonstrated at double-digit growth companies. These firms solicit feedback on policies, practices and performance nearly twice as often as single-digit growth companies. As a result, they take action more quickly to improve problem situations or remove barriers to success, Hewitt found.

The better communication among employer and employee also carries over to talks around career path and opportunities for personal growth, and managers who are more focused on helping employees meet career goals. Employees at rapidly growing organizations are 18% more likely to feel that there are sufficient opportunities to obtain the skills necessary for advancement, 16% more likely to feel that they have a chance to improve their skills and 16% more likely to know what skills they need to develop in order to advance, the Hewitt study said.