16 May 2021
David McCormack, chief executive officer of HIVE360, asserts that a robust payroll strategy can enhance employee wellbeing, business profitability, efficiency, and, in turn, employee engagement and retention
Engaging, and engaging well with employees can be the key to unlocking the recruitment and retention of the best talent for your business, and contribute to minimising the time-drain from issues like absenteeism and poor performance from your team.
What is employee engagement?
Employee engagement is one of the fastest developing growth strategies for UK businesses. An established management topic since the early 1990s, it is today inextricably bound with employer communication, trust, culture, and purpose, and as such, is a constant feature of management consultancy and research, university teaching and human resources (HR) practice, and a focus for executive teams, boards and investors.
There is no one definition for employee engagement, but essentially it is how employees feel and think about their workplace, work, and employer, where ‘work engagement’ is a real state of mind. The positive link between an engaged, happy workforce and improved productivity and organisation growth is well-documented. Amongst the figures that illustrate this are an increase in productivity of between 20–25% when a workforce says it is engaged, a boost to productivity of around 18%, and growth in profits of as much as 12%.
Engaged employees boost productivity, and even accelerate.business business growth. Feeling engaged with their workplace has a positive impact on employees’ level of absenteeism, retention, their innovation, client and customer service, and on employee purpose and their communication of their employer brand.
The link to employee engagement
From pandemic fallout to IR35 arrangements, bonus restructures and pay cuts, events in 2020 have created an even more complex landscape for payroll.
By its nature, payroll is a core data manager and the value of the information essential for the payroll system in providing deep insight into a business and its workforce, represents so much more than transactional details.
Utilised strategically, payroll data has the power to deliver vital operational statistics, identify actionable trends, and provide essential business information. Significantly, this not only informs accurate and meaningful decision making, but also has the potential to shape and inform employee engagement strategies, by using key information that creates individual employee ‘persona’ from insights like attendance and absenteeism, health, and personal issues.
Payroll and the payroll team engage with every level of a business, from the top to the bottom of the corporate tree. Its function and efficiency have a massive impact on the business – for instance, mistakes in payroll affect staff purpose, commitment, retention and productivity, and have a longer-term impact on talent retention.
Integrating payroll data functions with HR data and tech contributes to boosting employee engagement and provides a valuable tool for strategies and tactics around staff motivation, communication, reward and direction, flexible working, as well as overall business profitability.
Our in-depth study, People at the Heart, confirms this. It revealed that half of UK workers say an employer that provides good benefits, specifically flexible working, a comprehensive benefits package, mental health support, perks for work and leisure time, as well as a competitive salary and bonuses, are what make them feel appreciated and looked after.
The importance of empowering people to perform is borne-out of giving them that sense of purpose and inspiration to deliver for their customers and colleagues. Culture and purpose play a huge role in keeping employees engaged and making them feel valued at work. Growing numbers of UK workers are looking beyond financial gain to an employer that offers an environment where they feel they can thrive, grow, make a difference, and enjoy every day, and are rewarded for their contribution.
People feel engaged when they feel a connection, an attachment to their employer, and visa-versa. When a business defines and thinks about culture, they must include creating strategies that drive a sense of purpose and engagement for their employees, by exploring how they use employee input and feedback to build and improve their cultures. Payroll and a payroll strategy should be front and centre of this vital business planning. Engaged employees are happy employees, and happy employees will want to stay.
Featured in the June 2021 issue of Professional in Payroll, Pensions and Reward. Correct at time of publication.