The Correlation Between Employee Engagement and Profitability
Happy, engaged employees who are more fulfilled with their roles, will in turn increase your company profits. In this episode of Risky Business, Paul Martin and Colin Rooke discuss why creating a positive work environment and engaging with your employees, is good for everyone in the long run.
Listen to the full episode here, or read the full transcript below.
Paul Martin: Welcome to Risky Business Commercial Insurance with Butler Byers.
Paul Martin: This is Paul Martin, the business commentator here on CKLM. Again, we’re talking with Colin Rooke, the commercial risk reduction specialist with Butler Byers Commercial Insurance.
Paul Martin: As we always do in this time slot, we look at all things insurance. More appropriately I think Colin you would correct me, and we’ve been doing this for a couple of years now.
Paul Martin:: You’d probably wag your finger at me if I didn’t say risk management and your step by step risk assessment program that is available to any business owner, any commercial operation that is interested in digging in just a bit deeper to figure out, do I have the proper coverage, have all the right questions been asked, and can I save any money doing this?
Paul Martin: One of the topics that we’ve talked about and we’ve touched on a few times, I want to get into a little bit deeper this week if you don’t mind. The issue of employee engagement.
Paul Martin: Now you keep bringing this up and I must say, I scratched my head, and I wonder what does employee engagement have to do with buying insurance on my business? You assure me every time we talk about this, it’s actually a real thing.
Paul Martin: So let’s dig into that today. Employee engagement, why would an insurance company care whether or not my employees are happy coming to work?
Colin Rooke: I guess the really easy answer is, engaged employees that love what they do, that love their job. In fact, they don’t look at their job as a job, it’s a career.
Colin Rooke: The most simplistic way I could sort of portray the effects of having an engaged workforce is, engaged employees make sure the coffee pot is turned off at the end of the night.
Colin Rooke: Why do we talk about engagement? Why does that matter? Why is Butler buyers… I’m an insurance broker, I’m not an HR consultant. Why do I bring it up every single time in every single workshop? Doesn’t matter what class of business, I’m going to ask you questions about engagement, because it’s so important to the culture of the business.
Colin Rooke: It’s so important to the profitability of the business. If you look at the flip side, the negative, it’s a ginormous risk to the business.
Colin Rooke: First and foremost, I’m in risk management, and I’ve always said insurance is only one of the tools we use. It’s one way of dealing with risk. So, if we’re not having these conversations, then we’re not truly protecting our clients against quite frankly, one of the more the costliest risks that they’re going to face on a day to day basis.
Paul Martin: Last time when we were talking, we mentioned two things that triggered my thought process. One was the issue of a more engaged workforce leads to a more profitable company.
Paul Martin: All of a sudden you’ve just created a linkage for me that I understand now, why insurance companies are more concerned about it. Or that this is a topic that they want to dig into, because it affects profitability, and profitability is a critical factor in risk assessment.
Paul Martin: If your company is very profitable, it is a way different company than one less marginal. I’m starting to understand this, but we talked about it in the context as well of of mergers and acquisitions, and we see that increasingly. It’s becoming increasingly common.
Paul Martin: I can think of probably a handful of companies in Saskatchewan in the last year that have changed hands, and not the least of which was one that created an awful lot of attention.
Paul Martin: National headlines, a marijuana company that got taken over for north of a billion dollars. So, mergers and acquisitions is big things, and the corporate culture plays into that significantly.
Colin Rooke: We talked a lot about culture last time, and it really plays well into the discussion on employee engagement. Simply, culture is the way things work around here, which we talked about. When you look at engagement, it’s more how the employees feel about the way things work around here.
Colin Rooke: You can’t have a discussion on culture, and then ignore engagement. You’re going to have two businesses that are merging together and say okay, I now understand the culture. That’s only one part of the puzzle.
Colin Rooke: If you’re unaware of the levels of engagement, if you haven’t dug deep, if you haven’t thought about that, if a survey hasn’t been done, you really don’t know if things are working. You don’t know if you’re getting the productivity you think you’re getting.
Colin Rooke: You don’t know if you’re getting again, a happy workforce that will do anything to see this company grow. That’s why it’s so important that engagement, is part of every risk assessment that we do.
Colin Rooke: I’ve talked about-
Paul Martin: Maybe just before you move onto that, and keep that thought because we’ll come back to you. You mentioned the word employee engagement survey, that’s interesting.
Paul Martin: I assume that if I did a survey, there’d be some database I could go and compare to, to see how my engagement levels stack up against other companies in my industry, or in my community?
Colin Rooke: Absolutely, we do a lot of benchmarking, for example. We also provide our clients with access to either the survey itself, or at least the framework that will allow them to complete the survey.
Colin Rooke: For example, if we have about 20 questions that we feel should be on any engagement survey, but of course the businesses are always allowed to say we’re going to move some things around, we’re going to add, we’re going to take away. But, the answers really provide telltale signs of where the company’s going.
Colin Rooke: It’s so important that on an annual basis that management is aware again, of how their employees feel about the way things work in the respective businesses. The other funny thing about employee engagement is, you often hear what are the effects of low engagement?
Colin Rooke: High turnover, feelings of fatigue, confusion, low performance, and customer service suffers. You can say, well that’s one of the main arguments for we need to dig deep and we need to have an employee engagement survey done. A really interesting study just came out from Yale that shows that engaged employees also struggle.
Colin Rooke: About one in five hyper engaged employees are also feeling overly stressed and burnt out at work. Amazingly enough, it’s the over engaged that are the most likely to leave your organization as a result, than the lease engaged.
Colin Rooke: That poses a couple of problems. One, you have your best working employees saying, I worked so hard, I’m so engaged, that I just need to leave. I’m stressed out. I don’t know why I’m confused, and I need a change. Which is a huge risk to any business.
Colin Rooke: But, then even more alarming, you would think the least engaged employees would be the most likely to leave. They look at it like a job, a means to an end, it’s just a paycheck to them, but they’re not leaving, which is worse.
Colin Rooke: The stars are leaving because they’re overly engaged or for a lack of better words, the duds are sticking around because they’re so disengaged, they actually can’t move on. Won’t move on. Yet the workplace is suffering as a result.
Paul Martin: I’ve heard business people describe it as, my really good people, I’m worried that they will quit and leave. Another business person will say to them, you should be more worried about them quitting and staying.
Colin Rooke: Exactly. In fact, I’m going to use that.
Paul Martin: I worry that they’re going to quit and stay, rather than quit and leave. There’s an argument behind this for why you would invest in training. For example, why would I train my employees, they’re just going to get better and leave. The worst case scenario is you don’t train them, and they stay.
Paul Martin: These are the kinds of topics that you’re starting to ask business people about, and employers about, and they’re really filling out a form for insurance?
Colin Rooke: Exactly. We’ve really dug deep on the subject, and again, how does this ultimately affect my policy?
Colin Rooke: Well, we share this with the insurance markets, we share this with your insurance underwriter. We learn so much about where a company is going just based on their willingness to send out an engagement survey. At the end of the day, you have someone behind a desk that sees thousands of similar businesses every single year.
Colin Rooke: Our job is, the submissions that we send in, the clients that we work with, we want just a glimmer of light coming off that page, so that the underwriter is excited to work with you. The underwriter is excited to place your risk and the underwriter is confident that they’re working a plan. They’re trying to get better.
Paul Martin: All right, we’re going to come back and talk about that in a moment. We’ve got to take a little break. You’re listening to Colin Rooke, the commercial risk reduction specialist with Butler Byers Commercial Insurance. This is Risky Business taking a break, back in a couple of minutes.
Paul Martin: Welcome back to Risky Business commercial insurance with Butler Byers. Paul Martin here, and my guest today is Collin Rooke, the Commercial Risk Reduction Specialist with Butler Byers Commercial Insurance.
Paul Martin: Collin, just before the break we were talking about how you gather up this information, and then how you use it. You inform a much more informed application when you’re putting together a submission to an insurance company on behalf of a commercial client. Are you just trying to make your clients look better than everybody else in class?
Colin Rooke: Exactly, that’s exactly what we’re doing. Working on, or understanding your level of engagement in your workplace is definitely going to affect the bottom line.
Colin Rooke: But, this is an insurance program. It’s a risk program. Again, if we can convince an underwriter that you’re in a different class of business, a different type of business, a business that works on their risk, a business that’s working a plan, you will see the savings. You will see the results.
Colin Rooke: Quite frankly, it makes sense. You’re investing into your business, you’re trying to make positive changes. It is our job to make sure the markets are aware of that. It’s our job to make sure that your pricing structure is based on the work you’re putting in.
Paul Martin: You’ve had considerable success with some of your clients when you take them to market. Some of your clients have seen significant savings in their premiums.
Colin Rooke: The ones that save, when we’re talking deep discounts, and there’s always a lot of shocked faces in the room because this process, it’s not the norm.
Colin Rooke: The market isn’t used to hearing, well we’re gonna step back, we’re not going to quote this, we’re not going to fill out an application. We’re going to work on risk first. Until you’ve gone through it, until you’ve seen, it’s tough to realize the potential.
Colin Rooke: So, when we come back and we say, look, we’ve done a plan, we’ve worked a plan, we’ve presented the plan, we’ve shared the plan. Now, the market is confident that you should be in this category, this range. It’s really eye opening, but I always say you’re paying what you deserve to pay.
Colin Rooke: The problem has been lack of understanding, lack of awareness, lack of a process that will adequately portray your business to the insurance market. Again, you’re finally at the point where you should have always been.
Colin Rooke: When we discuss employee engagement again, and if anyone that’s listening now is thinking, geez that sounds like a lot of work. We make it easy for the client. So, I mentioned that we’ve developed the typical questions that could be asked. Nine Times out of 10, that’s all that’s required.
Colin Rooke: It’s as simple as sending it out, making the survey anonymous. Looking at the information, getting together as a management group, picking out key trends, and saying we have to do something about this.
Colin Rooke: It’s that simple. But, to even further simplify the process, let’s say our initial meeting is with one or two members of the management team, and there’s several other members, or maybe there’s several other layers of management.
Colin Rooke: We’ve even developed a presentation that you can give to the management group, to your staff, to the board, to an advisory board that explains what it is, what the problem is, how you’re going to address it. We’ve even taken that step to say, we’ve made the explanation as to the why, easy.
Colin Rooke: Because, we really believe in the subject and we say okay, if we’re going to dig deep, if we’re going to sell this, we need to make it easy for our clients to understand and follow through, because if it’s a lot of work, it’s not going to happen. The results are so impactful to our clients.
Paul Martin: Now, when you talk this topic of employee engagement, the need to do a survey, and all that sort of stuff, what are the kinds of things that you’re trying to identify in the survey? What does an engaged employee look like, and what are the characteristics of an engaged employee, and maybe that helps business people understand this just a little bit more clearly.
Colin Rooke: Really good question, and there’s no magic formula and it’s funny when we go through this process and often we share the questions on the survey, they seem like common sense. They see my questions you should always be asking.
Colin Rooke: Companies are surprised that they don’t already have the answers, but we’re asking things of the employees like, do you know what is truly expected of you at work? You’d be amazed at how often the answer is no.
Colin Rooke: You say, well, this is crazy. The average employee tenure here would be 13 years, how could they say they don’t understand what’s expected of me at work. But that comes down to communication and clarity.
Colin Rooke: Questions like, do you trust your immediate supervisor? Do you receive consistent feedback on your work?
Paul Martin: There’s a beautiful topic. This notion of a performance reviews. I remember I spent some time with a fellow who was an expert in this, and he would ask employers, how many of you do performance reviews? About half the hands would go up.
Paul Martin: And, They say how many of you liked doing them? Half, of those would drop their hand. Because, it’s the thing that people try to avoid, but it’s very simplistic, very simple basic feedback. And you say that’s on a high priority for an employee.
Colin Rooke: You think about it if you have an annual review, every employee I know wants to get noticed, wants to feel valued. If the annual review is held in such esteem to the employee, yet on the management side it’s a drag, it’s something that we have to do.
Colin Rooke: The employee is gonna pick up on the energy level in the room. How do you think low energy in an employee review is going to impact productivity for the next year? Everyone talks in the workplace.
Colin Rooke: So if you have lack luster reviews, that lack luster review is going to get shared with the rest of the workforce, and an overnight you’ve bred a culture of, this is just a job, the employee doesn’t matter.
Paul Martin: And, you’ve got tools at your disposal at Butler Byers that will help an employer sort their way through this. All they need to do to access them, is give you a call. and he’ll do it for nothing for them.
Colin Rooke: Yeah, and if any of these questions that I’m asking have sparked interest, or if you’re thinking geez, I don’t know the answer to that.
Colin Rooke: Here’s another one that it’s my favorite. At work, do your opinions seem to count? If you don’t know those answers, and what I mean is I’m not suggesting that you think you know the answers, but if you haven’t seen those answers on paper, your employees putting pen to paper saying yes, I believe my opinions do count at work. If you haven’t done that, that’s why you need to sit down with us and have a risk assessment done.
Colin Rooke: We’ll discuss engagement, we’ll prep you, we’ll give you everything you need to know and to do, and we’ll find those answers, and we will help boost productivity retention.
Paul Martin: Collin as always, the time just slides by. Thank you. This has been a most interesting and insightful conversation.
Paul Martin: You’ve been listening to Collin Rooke, the Commercial Risk Reduction Specialist with Butler Byers Commercial Insurance.
Paul Martin: I’m Paul Martin, you’ve been listening to Risky Business Commercial Insurance with Butler Byers.