You’ve probably heard it a thousand times: happy employees lead to happy customers. The idea that employee engagement affects customer service and retention is intuitive.
Employee engagement affects customer service in a number of positive ways. It seems only natural that a disengaged employee is less likely to provide a good customer service experience (and even less likely to provide an outstanding one). Is an engaged workforce really the key to better customer service?
It seems like it should go without saying that the major ingredient of a truly customer centric business is engaged employees. Engaged employees are more willing to go the extra mile to resolve a client’s problem or close a sale, contributing to a culture that consistently delivers great customer service.
Engaged employees pay way more attention to their work. They take real ownership of their tasks, deliver on their commitments both within and outside the organisation, and are passionate about satisfying the customer because they personally feel like they ‘own’ the result of their work.
What exactly is employee engagement?
Engaged employees are those who fully immersed in and enthusiastic about their work. They usually have a very deep and personal emotional attachment to their work. They are the self-motivated employees in the workplace who will go above and beyond what is expected of them on the job and their exceptional employee engagement affects customer service in a positive way.
According to a 2017 IBM study, eight out of ten employees felt more engaged when their work was consistent with the core values and mission of their organisation and another 2017 study by corporate training firm Dale Carnegie has found that the key drivers of employee engagement are:
- relationship with direct manager: eight out of ten employees dissatisfied with the direct manager were disengaged;
- belief in senior leadership: seven out of ten employees who were not confident in the abilities of senior leadership were not fully engaged, and;
- pride for working for the company: roughly five out of ten employees who take pride for their organization’s contributions to society were engaged.
Employee engagement differs from employee satisfaction, which is related to whether or not employees are happy at work and in their jobs. Keeping an employee engaged takes more than just giving the employee a pay rise, higher bonuses, fresh coffee in the office, more days off or a good pension plan.
What is the difference between engagement and satisfaction?
Engagement is less about what the company does for the employee and more about what the employee does for the company. While a satisfied employee is happy to show up to work, an engaged employee is happy to show up to work too and also actively looks for ways how to the company better.
One outcome that proves employee engagement affects customer service, is they throw themselves into their job wholeheartedly, because they feel that they have a vested interest in it.
It is not surprising, however, that employee satisfaction is an important prerequisite to employee engagement, according to a study conducted by the Forum for People Performance Management and Measurement in the Medill Integrated Marketing Communications program at Northwestern University.
When an employee is unhappy at work, they aren’t motivated to go above and beyond their job description for a customer. They are busy looking for their next job and badmouthing the company as they complain to their friends and family at the end of every work day.
On the other hand, when an employee is happy at work, they are motivated to go the extra mile and do all that they possibly can to improve what a customer experiences when they interact with the company. They want to see both themselves and the organisation succeed.
“…when an employee is happy at work, they are motivated to go the extra mile and do all that they possibly can to improve what a customer experiences.”
What does employee engagement mean for customer service?
Another key finding by this Northwestern University study is that employee engagement affects customer service, reporting that organisations with engaged employees have customers who use the company’s products and services more often and with higher satisfaction than customers of companies with disengaged employees.
Remember satisfied customers cost less to serve, easily become repeat customers, and are generally more profitable for the organisation.
Research company Temkin Group also recently found a correlation between efforts in employee engagement and success in customer experience. In its 2016 Employee Engagement Benchmark Study, the firm revealed that companies which excel at customer experience have “1.5 times as many engaged employees as do customer experience laggards.”
A recent OneReach report also found that the best way to improve customer service is to focus on the employee experience. Of 63 industry influencers interviewed, 16 said concentrating on the employee experience was the best way to improve customer service, followed by walking in the customer’s shoes (13 responses) and defining and reviewing service values within the company (11 responses).
The Demand Metric 2013 Employee Engagement Survey concluded that the impact of how employee engagement affects customer service is undeniable, reporting that organisations that have more than 50% employee engagement retain more than 80% of their customers.
Furthermore, a study by Washington State University found that customer satisfaction is directly linked to employee satisfaction and that financial success is directly linked to customer satisfaction.
What is the state of employee engagement globally?
According to the 2017 Aon Hewitt Trends in Global Employee Engagement report, employee engagement has retracted in the last year around the world. Just 24% of all employees fall into the Highly Engaged category and another 39% can be categorized as Moderately Engaged, putting the global engagement score at 63% compared to 65% the previous year.
Each of the three elements in the engagement index dropped. The Say component, which measures employee advocacy, went from 69% of employees to 68%. Stay, which measures the likelihood that employees will remain at their current employer, went from 60% to 59%. The Strive component, which assesses willingness to give extra effort, also dropped by one point, from 64% to 63%.
The report went on to highlight that after a huge five-point jump last year, Asia Pacific (APAC) is coming back to earth with a three-point drop this year. Just 62% of employees in APAC can be categorized as engaged compared to 65% a year ago.
This drop was largely due to decreases in engagement in four of the region’s largest markets: China (-3 pts), India (-2 pts), Japan (-2 pts), and Indonesia (-1 pt). Of the largest APAC markets, engagement increased in only Australia (+3 pts) and South Korea (+2 pts).
Many customer experience experts now agree that increasing employee engagement is the first step to providing a better customer service.
However, many companies are unfortunately still not paying enough attention to how employee engagement affects customer service in a positive way.
A 2015 Gallup study found that only 32% of U.S. workers are engaged in their jobs. The majority (50.8%) of employees were “not engaged,” while another 17.2% were “actively disengaged.”
It also turns out that the cost of turning a blind to it is quite high for organisations. The Engagement Institute — a collaboration of The Conference Board, Sirota-Mercer, Deloitte, ROI, The Culture Works and Consulting LLP — recently released a study of 1,500 respondents showing that disengaged employees cost companies between $450 and $550 billion a year.