Want Engaged Employees? You’ll Need Engaged Leaders

There’s never been a more important time to equip our leaders with engagement tools. We’ve long known that strong employee engagement correlates with strong organizational performance — and now Gallup’s recent State of the Global Workplace Report is highlighting another crucial correlation: leadership’s impact on individual contributors. Gallup found that “70% of the variance in team engagement can be attributed to the manager” and noted evidence that employees are more likely to be engaged when managers are engaged. 

The same report noted that managers have more negative experiences than non-managers and “are more likely to be stressed, angry, sad, and lonely than non-managers.” This is indicative of the larger concern we’ve seen since early 2020: workers at every level are struggling with their well-being. At Semafor’s The World of Work 2024 event last week, Gallup Chief Scientist Jim Harter asked the crucial question: “How do you inspire a workforce when managers themselves aren’t fully inspired?”

This is an $8.9 trillion question — because that’s how much worldwide productivity is lost to disengagement each year. 

To create healthier, more sustainable organizations, engagement should now be a key metric. Organizations with highly engaged business units and teams see higher profitability, customer loyalty, employee wellbeing, productivity, and participation — and their leaders, by and large, are setting the tone for individual contributors.

So what can we do? Where do we start? 

Jim Harter says that policies won’t solve engagement challenges, emphasizing the importance of “people managers who are actually involved on a weekly basis.” He recommends creating a climate of “ongoing interaction” and an “environment of high accountability” for people managers and individual contributors.

Etsy Chief Human Resources Officer Toni Thompson takes a similar point of view and says “telling people ‘use your benefits’ isn’t enough.” She highlights Etsy’s internal leave budget as an excellent example of how to create an infrastructure that supports managers and individual contributors in meaningful ways: When team members take leave, managers use the designated budget to hire contractors that can temporarily bolster the team or offer it as a bonus to employees who opt to cover the additional workload. This reduces the stress and burden a manager often feels when a team member is gone for an extended period of time, positions the team to work together to minimize business risks, and ensures employees who cover the additional workload feel fairly compensated. 

Gone are the days of bucketing engagement into “company culture” topics. Engagement is now a key component of an organization’s livelihood, and a factor that’s much too costly to overlook. To thrive in the future of work, we must give our leaders the resources they need to stay engaged and, in turn, stoke engagement within their teams. 

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