Fully engaged in making things better

Monday, September 21, 2009

Nita Clarke will be one of the speakers at Public Service Events' Enterprise, Skills and Innovation conference in London on 24 September. Here, she and Hannah Jameson look at the need to ensure people's skills are being fully used to the benefit of the organisations they work for

For businesses in Britain, the challenge is not just to survive a period where credit is scarce, demand is low and the shape of the recession is still uncertain; it is also to respond to the significant restructuring of the economy taking place at the beginning of the 21st century, which the downturn has only accelerated.

Debates will continue on the size and shape of the City after the credit crunch, and the future of UK manufacturing, but there is a broad consensus on the long-term need to improve the skills of UK workers to enable the economy to expand in the areas where Britain can compete – advanced manufacturing, knowledge-intensive services such as health and education, and the creative industries, for example. In a globalised world, Britain's future cannot rest on goods and services produced by low- skilled, cheap labour in unproductive workplaces.

It is in this context that the MacLeod Review recently reported to government. Its task, when it was established in October 2008, was to find out how important the idea of employee engagement was, and what benefits it could offer companies, organisations and individual employees. By March it was apparent that the economic situation was changing rapidly, and the review was asked to consider whether the take-up of engagement approaches could improve UK competitiveness and help support Britain's efforts to come through the current economic difficulties.

The review has moved the debate on the workplace forward. It did not just look at skills, important though they are; it tried to find out what conditions are necessary to ensure that employees' skills are put fully to use for the benefit of business. It did not just look at innovation. We all know we want more of it, but what workplace relationships are needed to persuade employees to share their best ideas with their colleagues and managers? We know Britain lags behind other countries in terms of productivity, but how can you increase productivity while improving employee wellbeing?

The evidence gathered during the course of the review shows clear correlations between engagement and performance. Employers and employees, as well as academics and research houses, submitted evidence on how giving greater consideration to the quality of the workplace relationship between employees and employers can transform the prospects of an organisation. To give just one example, Standard Chartered Bank reported in 2007 that branches with a statistically significant increase in levels of employee engagement had 16 per cent higher profit margin growth than branches with decreased levels of employee engagement.

For the purposes of our economy over the coming years, struggling to recover from the recession while finding new areas for growth, engagement offers some important opportunities. Higher levels of engagement are strongly related to higher levels of innovation. As Julian Birkinshaw of the London Business School explained: "Employee engagement is the sine qua non on innovation... you cannot foster true innovation without engaged employees."

Public services needing to reduce costs while improving quality should look carefully at the evidence that suggests that the link between engagement, customer service and profitability translates to the public sector, with trust and public confidence at the end of the chain, rather than profit.

There is no magic bullet for engagement – it is less about a list of management techniques than it is a new way of thinking about organisations and the people within them. The recommendations of the review focus on raising awareness of engagement and tailoring business support services to help those who want to get more from their workforce. These have been accepted by government. But the pressing need to return the UK economy to growth could provide an even more valuable opportunity to get companies, organisations, employees and the public discussing how we can create productive and innovate workplaces where employees are prepared to go the extra mile.

Nita Clarke is director of the Involvement and Participation Association (IPA) and vice- chairwoman of the MacLeod Review. Hannah Jameson is research manager at the IPA