Weekly Wrap: $720 Million Spent on Engagement and This Is All We Get?

Employee engagement is one of those topics that people can’t seem to get enough of.

There are a lot of reasons for that, but mainly, I think it is because a great many managers know that engagement is a good thing that would benefit their organizations but they simply don’t know how to get their workforce to buy in.

But in all the back-and-forth discussion about engagement, there’s one thing that seems to be perfectly clear: businesses are spending a big chunk of money trying to make it happen.

Some $720 million per year spent on engagement

Bersin & Associates came out with a new report his month titled Employee Engagement: Market Review, Buyer’s Guide and Provider Profiles, and here is what jumped off the page at me:

The research shows that organizations currently invest approximately $720 million annually in engagement improvement, including both outsourced and internally developed programs. Only 50 percent of the potential market has been tapped, with half the organizations stating an interest in engagement programs actually investing.”

To put it more simply, organizations are spending nearly three-quarters of a billion dollars per year (emphasis added) trying to improve employee engagement — and that only represents about half of the $1.53 billion that Bersin projects that companies will eventually spend on it.

My take? Never has so much been spent on so very little.

Yes, $720 million is a lot of money to spend on employee engagement, especially when the most recent survey from Towers Watson shows that 63 percent of U.S. workers “are not fully engaged in their work and are struggling to cope with work situations that don’t provide sufficient support.”

Makes you wonder what organizations are getting for their $720 million, doesn’t it?

Can anybody really define “engagement?”

The Bersin report also gives other key trends when it comes to engagement that are worth noting, such as:

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  • Providers do not agree on how to define employee engagement. In fact, definitions vary dramatically, with elements including commitment, goal alignment, enjoyment, performance, and the antithesis of “burnout” – to name just a few. Buyers need to define what employee engagement means for their organization and select providers that align with that definition.
  • Market innovators are integrating engagement into all HR functions. HR leaders increasingly are focused on aligning engagement efforts with business strategy, and they are also integrating engagement with HR programs and organizational operations. From recruiting to building a leadership bench to alumni relations, innovative providers are helping their clients infuse engagement into every step of the employee lifecycle.
  • “Big Data” and analytics are on the rise. While most of the engagement providers reviewed in this report offer some way to measure the relationship between engagement and organizational performance, only a few have moved into a new frontier – HR analytics. Since HR analytics enables organizations to optimize workforce performance and fuels continual improvement efforts, buyers should consider their requirements in this area carefully.

Can you improve it if you can’t define it?

For my money, the fact that no one really knows how to define employee engagement is the real bottom line problem when it comes to trying to improve it. If you can’t define it, how the hell can you be expected to nurture and grow it among your employees?

This is just my 2 cents, but this report pinpoints a lot of the mindlessness in today’s American workplace when so much money is spent on improving something as critical employee engagement with such terrible results. Makes you want to get a t-shirt that says something like, “We Spent $700 million on Employee Engagement and All I Got Was This Lousy T-Shirt.”

Until we get our hands around engagement — defining it, measuring it, appreciating it, leveraging it — we’ll simply be throwing more good money after bad chasing something that everyone knows is good to have but that most organizations don’t have the foggiest clue about how to generate.

The Bersin report, if we look at it closely, may be a good start that heads us in that direction.

Fired from a “job for life”

Of course, there’s a lot more going on than just how much organization’s are spending to improve engagement in the news this week. Here are some HR and workplace-related items you may have missed. This is TLNT’s weekly round-up of news, trends, and insights from the world of talent management. I do it so you don’t have to.

  • How much would you pay for an idea? At Southwest Airlines, according to the San Francisco Chronicle, management is looking for ideas from workers that would save the company $5 a day.
  • Not who you want handling your food. The Miami Herald reports that nine out of 10 — yes, 90 percent — of Miami restaurant workers do not get sick days, and as a result, 50 percent of them have gone to work sick at some point.
  • Does anyone have a “job for life?” A confidant of the late Apple chief Steve Jobs is suing the company for firing him last year. He claims, according to the Los Angeles Times, that Jobs promised him a job for life and that, “This express promise by Steve Jobs was consistent with a practice that Steve Jobs had, acting on behalf of defendant Apple, of promising job security to certain key employees who worked directly with him for many years.”
  • How the lack of normal office noise hurts productivity. NPR’s Health Blog notes that some workers find the absence of other workers a problem during vacation season, because the lack of people’s voices make the normal sounds of the office more apparent, and in turn, more distracting.
  • Just HOW much money does that new Best Buy CEO make? The Minneapolis Star Tribune does a nice job of breaking down the specifics of the compensation package the new CEO of Best Buy is getting (yes, he gets a $20 million signing bonus). But here’s the kicker: according to The Wall Street Journal, Frenchman Hubert Joly would REALLY get a giant payout (as much as $32 million) if the electronics retailer gets taken over, as is being proposed by the company’s founder, who holds 20 percent of Best Buy’s shares. And you wonder why so many people believe CEOs are grossly overpaid?

John Hollon is Editor-at-Large at ERE Media and was the founding Editor of TLNT.com. A longtime newspaper, magazine, and business journal editor, John has deep roots in the talent management space. He's the former Editor of Workforce Management magazine and workforce.com, served as Editor of RecruitingDaily, and was Vice President for Content at HR technology firm Checkster. An award-winning journalist, John has written extensively about HR, talent management, leadership, and smart business practices, including for the popular Fistful of Talent blog. Contact him at johnhollon@ere.net, connect with him on LinkedIn, or follow him on Twitter @johnhollon.


7 Comments on “Weekly Wrap: $720 Million Spent on Engagement and This Is All We Get?

  1. It is because there is no universal definition, measure or intervention that creates the cornucopia of consultants and approaches.  But I don’t think we can ever agree on a definition that makes everyone happy.

    In addition, engagement as practiced today is a one-way street and employees aren’t stupid.  

    Each time a survey comes out, they answer they’re disengaged and the next quarter they get doggie daycare.  Next survey – they rate themselves disengaged and then they get Bobby Flay in the company cafeteria.  Employees are smart – they know that the more they signal they’re disengaged the more the company gives and the more they get. 

    I think we really need to start making this a two-way street and start putting responsibility and accountability on the employees as well as the company.  

  2. Do we have to have a SINGLE definition of employee engagement????   C’mon people.  Define what it means for your OWN company —- stop relying on the over-used “best practices” game.
    And as far as measurement —- I don’t have the answer — but I dismiss employee engagement surveys.  Employees have good days and bad days and some employees have “fun” with lying on surveys.   Frankly I like the old fashioned method of talking to employees —- WOW what a novel idea!

  3. I think employee engagement is the latest flavor of the month of things company try to get something for nothing.  It used to be values – we’ll publish a list of what the company stands for because in search of excellence showed that great companies had a common set of values.  But saying you want to do it is not the same as actually doing it.  Employees are engaged when they are treated with respect, given a say in how they meet objectives and are “treated like people.”  Many companies don’t treat their employees well, and then wonder why the employees are not that into the company.  

  4. Good read.  I see engagement as such a personal tactic between an employee and his/her work.  The more I learn about it, the more I am skeptical of large company wide engagement programs.

  5. The definition of engagement really doesn’t matter.  What matters is that you see the fruit of engagement in terms of creativity, productivity, respect, and collaboration.  Organizations would be so much better off taking half of what they pay to measure engagement every year, and investing it into developing leaders so they lead progress on meaningful and serve as catalysts to their teammates.  This is where engagement is won or lost no matter how you define it. 

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