How disengaged workers both increase costs and reduce revenue

By Brian Galonek

As competition swells in the gaming space, casinos have looked increasingly towards finding new revenue streams and expanding existing ones to boost the bottom line. These are necessary undertakings to be sure, as nothing trumps customer loyalty and its effects on profitability.

That having been said, there is another tactic that can also produce a substantially positive impact on the bottom line. This method can greatly improve the customer experience, and by doing so, generate more loyal, repeat customers who come more often and stay longer, and it has nothing to do with marketing (at least not external marketing).

The tactic of which I speak is “employee engagement” and it is the prized possession of informed companies and organizations that have discovered its enormous value (Disney probably being the best example). The challenge of improving engagement may seem daunting, but it is really just another way of saying that you need to improve the connection between the employer and employee. It is about focusing on the shared interests of both groups, and about making and keeping commitments to inspire trust.

Engagement is not about punishment, which most companies are already very well-equipped to dole out, but rather it involves deploying tools and processes to recognize and reward the good behaviors, and thereby eliminate the bad ones. Luckily, most companies already have many of these tools in place, such as new employee orientation processes, training programs, wellness initiatives, safety meetings, and employee communications systems, just to mention a few. These tools form the structure and the wiring that are essential to achieve higher levels of engagement; what is needed is the spark.

The real benefi ts of a highly engaged workforce often shock people. According to a comprehensive three-year study conducted by Towers Watson, companies with engaged employees grew 19%, while companies with disengaged employees declined by 30% during that same period. Below are some other stats from that same study. Organizations with higher-than-average employee engagement realize:

• 27% higher profits
• 50% higher customer loyalty
• 38% higher productivity
• 20% more revenue per employee
• 57% higher shareholder returns

These numbers may give you pause; I know I was amazed the first time that I saw them, but when you start to drill down on the effects of a disengaged workforce, you can easily see why the numbers are so severe. Disengaged workers both increase costs and reduce revenue. On the cost side, you can look no further than employee turnover, estimated to be as high as 80% in some casinos. Researchers have pegged the cost of losing a single employee at between $5,000, for less complex jobs, and as much as $12,000, for more complex jobs. These represent just the hard costs (advertising, HR staff , training, etc.), the soft costs (strain on other workers, disruption to operations, morale) are often two to four times higher. Crunch some numbers and you can quickly see that a casino with 2,000 employees and an annual turnover rate of 30% is staring at a multi-million dollar turnover expense.

On the revenue side, those disengaged employees can do a lot of damage before they quit or get fi red, or worse yet, if they remain employed. They are the ones that deliver inferior customer service both to internal and external customers, and by doing so reduce the customer loyalty that is so vitally important. How much does your casino lose every time poor customer service costs you a patron? Once you understand that disengaged employees drive expenses higher while reducing revenues, you must surely come to the conclusion that there is no more important issue to address; but how?

Most casinos will have many of the employee engagement tactics in place already; they usually are just underutilizing them. Recognition programs, wellness initiatives, safety rewards, suggestion programs, new employee orientations, training sessions, employee surveys, goal sharing, and a host of other common practices are all great venues to boost engagement levels. The problem for many casinos is that many of these initiatives are stale or underutilized.

So how can a casino turn these programs into a useful suite of engagement tools? For starters, they need to take a cue from their marketing departments. When a marketing department wants to launch a new campaign, they do so with creative thinking, skilled design, detailed execution, and extensive communications eff orts. The same is needed to better engage employees. Here are some tactics to accomplish this goal for your “internal customers” – your employees.

• Brand the Program – People respond to brand names, which is why the generic food section of any supermarket is so small. People trust brand names, and by adding one to your initiative, you will immediately capture the attention of your workers, who will see the eff ort as more sincere and not some off -the-shelf attempt at something new that required very little effort.

• Communicate – Take every opportunity to communicate your branded program to your workers so that they see the weight of the eff ort. Use printed materials, web pages, social networks, meetings, and any other opportunity to communicate with your employees to promote the values and benefits of the program.

• Make It Sincere – Make sure there is substance behind it. If it looks like “lipstick on a pig,” it will fall fl at and look like a halfhearted attempt to assuage employee concerns. It must have real benefi ts that are applied consistently and fairly to all participants. Treat your employees exactly like you expect them to treat your customers.

• Recognize and Reward – Lack of Recognition is often listed as the number one reason why people leave their jobs. Face-to-face recognition accompanied by an incentive program is one of the best ways to improve the connection points between the employer and employee, and to portray your new employee engagement program in the proper light.

• Involve the Employees – Don’t design and launch it in a vacuum. Create teams of employees from all departments to help give the program direction and make sure that everyone knows that the organization received input from a broad base of employees and departments.

• Find the Right Partner – An undertaking of this size requires outside expertise to be done right. Use a partner with a proven track record of understanding both the gaming industry and the power of employee engagement.

Driver Safety is among the top priorities for fleet managers according to a new study by PHH Arval, a fleet management services provider. While driver safety is, and should always be, a top priority, the full story includes reference to a number of additional financially related goals, including:

- Improved driver productivity
- Improved fuel economy
- Increased driver awareness
- Better communications, and
- Lower maintenance costs

If this list of goals sounds familiar it is because it is virtually the same list of benefits provided by engagement (recognition / rewards) programs. Such programs garner driver attention at a higher level, and once safety manager have their attention they can more effectively improve a driver’s understanding about these issues. The results are typically a 4:1 return on investment for these cost savings/money making issues….and oh yes….also a much safer fleet!

The implications of this Forbes article are far ranging but from the standpoint of Employee Engagement the message is clear.  Companies that ignore the need to interact with their employees on a higher level than was normal in decades past risk finding themselves the victim of destructive undercurrents at the hands of their own staff.

Click here for the full story

In an article I recently wrote for Occupational Health & Safety I detail the importance of employee engagement as a tactic towards improving safety. The entire article can be seen by clicking on This Link.

In the article I also cover the following topics:

• The need to brand and communicate your program
• The keys to building a successful recognition/rewards program
• The importance of culture and structure
• The mistakes to avoid

1. 1. Using cash
   2. Using high value awards
   3. Introducing the element of chance
   4. Rewarding groups for group behaviors

The importance of employee engagement as it relates to safety is addressed in a brief article titled “Turn Apathy into Engagement” in the February 2011 issue of Industrial Safety & Hygiene News.  The article succinctly calls out several of the connection points.  I have pasted the best paragraph in the article below with the link to the full article below that.

“Most companies have been so focused on observations, targets, policies and lagging indicators such as OSHA recordable rates and lost-time metrics that they’ve lost a handle on the very safety culture that keeps productivity high and workers alive and healthy. The engagement process in safety and health is best accomplished through a serious culture improvement initiative and navigated through a safety culture management system.”

Employee Engagement is Key to Safety Improvement

Periodically the engagement industry (also known as the incentive industry, motivation industry, premium industry, etc.) faces challenges from outside sources. These sources typically are academics/authors many of whom do a fair amount of public speaking to promote their work. While it would not be fair to make the blanket claim that their assertions are baseless it would be accurate in the vast majority of situations to say that those claims are at best misleading and at worst harmful.

Case in point, most recently Daniel Pink, author, public speaker and former Al Gore speech writer, made a presentation at a TED (Technology Entertainment Design) event in which he stated that motivational techniques:

• dull thinking
• block creativity
• do harm
• only work for simple tasks

He further stated that these findings were “fact” and then went on to cite some extremely random samples. I should mention that he confessed at the beginning of his presentation that he did terrible in law school, finishing at or near the bottom of his class. Based on his shoddy extrapolations and conclusions I can see why. I know that seminar speakers need to stir up their audiences to keep things lively, and telling business leaders that they have everything backwards is one way to accomplish this, but it is dangerous to present opinions as facts and then advise people how to run their businesses.

I’ll leave it there for now but will post specific challenges to his assertions in the near future. Below is the link to his presentation if you would like to see it for yourself. I am only supplying this link and commenting on this poor presentation because we in the engagement industry face these types of baseless challenges from time to time and it is important that collectively we are able to beat them down with substantive responses.

http://www.ted.com/talks/dan_pink_on_motivation.html