Does staff morale affect your company's success?

By Phil Sheridan on 23rd February 2017

Low staff morale can cost your company big – and you're not alone. A 2013 Gallup study found that only 17 per cent of UK employees are fully engaged with their job. While removing active disengagement from the workforce could see an increase productivity of between £50-70 billion nationwide per year.

Findings among managers and executives were even gloomier, with just 19 percent reporting a “high interest” in their jobs. According to Gallup, this can have serious repercussions throughout the business, including higher absenteeism, lower customer satisfaction and lower retention rates.

The benefits of restoring employee morale

What happens when you flip the script? Gallup in 2012 found there are many rewards to be gained from improving staff morale. Studying 49 industries in 34 countries, they looked at the relationship between employee engagement and organisational performance outcomes, and found that the most engaged teams (top 25%) outperformed the least engaged (bottom 25%) in multiple categories. These included:

  • 10% better customer ratings
  • 22% higher profitability
  • 21% higher productivity
  • 25-65% lower turnover
  • 37% less absenteeism

While some of these figures may seem manageable, it's wise to equally not underestimate the amplifying effects that low morale can have. Just as happy employees generally means happy customers, just one disgruntled service staff member could result in a harsh customer review that causes lasting harm to the company's brand. Another costly result of poor staff morale is high staff turnover. Quite simply, when employees don't have enough reasons to stay on, they are more likely to leave; and they are also less likely to recommend their former employer to industry peers.

How can staff morale be improved today?

Staff morale can affect employees' attitudes towards their job, colleagues, managers and the organisation. The root causes of low employee morale can vary. They can include stress, unchallenged, or a lack of voice in the company. It can also stem from business practices that are viewed by staff as threatening their future financial security, such as excessive outsourcing.

Low staff morale can, however, be turned around – and here are some ways to do it.

1. Create an open dialogue

Communication in most businesses is traditionally top-down, with staff being asked to listen to executives and managers, and not vice-versa. This lack of open dialogue can result in managers ignoring problems that exist among employees until there is a serious incident (or the business is hit with a bad financial report). Therefore, it's important to have regular conversations and follow-up with staff that disclose their feelings about their job and the company's managerial style. Demonstrating an open dialogue establishes a level of mutuality and fairness - one of the strongest influencers of happiness. By constantly monitoring staff morale, you're letting your staff know that their concerns matter, while identifying potential problems earlier.

2. Provide professional support and development

Low staff morale can stem from employees feeling underutilised in their jobs. It can also come from employees feeling over-challenged, or that they lack adequate support. Improved skills screening can help to address this problem, as can asking staff to take personality quizzes that reveal their “soft skills”. It's also important to provide staff training and mentoring programs that help employees grow, develop and acquire new skills. This will help to create a supportive atmosphere that has a positive impact in the workplace. Empowering staff to determine and drive their own career is ultimately beneficial for the company in encouraging a sense of confidence and ownership by each employee.

Related: The importance of employee development

3. Offer a better work environment

Often overlooked, the office surroundings can certainly influence employee mood, especially if they are exposed to them for seven or eight hours a day. Adding a few indoor plants, repainting the office in brighter tones, or just moving a noisy printer into another room could help to improve your office “feng shui”, and staff happiness.

4. Promote healthier lifestyles

To a large extent, staff happiness is a by-product of the promotion of mental and physical health. As well as being happier, healthy employees are less likely to get sick, which means more stable productivity in the workspace. Research has discovered that standing up and walking around for just five minutes every hour can lift a person's mood and combat lethargy. Also, try to avoid excessive work hours. When you let the office turn into a competition over who can spend the most hours at their desk, this will only harm productivity and lead to burnout.

5. Reward staff for doing good things

When your employees go above and beyond their everyday jobs to achieve great things for the company, make sure they know it's appreciated. This might mean praising them during a staff meeting, or if it was a team effort, organising a staff lunch at a local restaurant.

Related: 7 ways to reward your staff...without breaking the bank

The key drivers of staff morale will vary from one organisation to the next, but the basic rules are the same. When you listen to your employees' needs and concerns and take appropriate action, higher morale and engagement will follow.

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