‘Leadership’ is the most important factor in employee engagement while ‘career development’ came in as a close second, according to a survey by professional services firm Towers Watson.
Engaged employees tend to remain in the organisation when they believe that the management is doing a good job, said Amrita Prasad, senior consultant for organisational surveys and insights at Towers Watson.
As such, companies should see leadership development expenditures as a viable investment rather than an added constraint on HR budgets in the uncertain economy.
The study revealed that companies with high employee engagement yielded a higher net profit margin of slightly more than two percent, as opposed to companies with low employee engagement that had a negative margin of 1.38%.
Companies who prioritise employee engagement are likely to see its benefits through reduced absenteeism and increased customer retention.
Prasad said that organisations ought to view employee engagement and retaining top talent as a long-term process.
Pay may be a key driver for new recruits, but it is an external pull factor and companies have little or no control over market offering rates.
She suggested that employers focus more on concepts such as health and wellness which could help prevent employee burnout and increase productivity.
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