Leadership ability gaps, poor compensation hurt employee engagement

Leadership development is key to keep employees engaged.

By Sathee Brent,

With the challenges of keeping workers in what is becoming a highly competitive job market, employers are finding it difficult to ensure they retain their most talented employees. While companies can offer plenty of perks, a small salary or lack of a work-life balance could be their downfall when it comes to employee retention and recruitment.

To help push employees toward - and not away - from employers, leadership at these companies needs to pay attention to employee engagement. However, many organizations have leadership capability gaps that are only growing, according to a new study by Deloitte. 

The Deloitte study found there is a -36 leadership capability gap in 2015, which is worse than the -34 gap measured in 2014. 

As having the right leaders becomes a key issue for employee engagement in 2015, employers should consider how to position the best managers and executives to energize the workforce and increase sales in the long run. 

As the Deloitte study pointed out, building leadership was the second biggest issue for respondents, with 9 of 10 stating it was "important" or "very important." Despite the significance of leadership in the workplace for shaping employee engagement, many companies are not effectively addressing these problems. 

Biggest leadership challenge? Engaging millennials
With the problems presented by a disengaged workforce, leaders should pinpoint which workers are likely to bring down productivity by not being as satisfied as they could be and turn them around. Gallup reported fewer than 1 in 3 employees in the U.S. were engaged with their jobs in 2014. Although this is 2 percentage points higher compared to the previous year, it showed employers still have a long way to go to make sure employees are satisfied with their jobs to sustain productivity gains. 

The younger the workers, the more disengaged they were in the Gallup survey. Although millennials encompass a large portion of the population and will eventually become the dominate generation in the workplace, leaders are having trouble engaging them, according to Gallup.

"Gallup's employee engagement data reveal that millennials are particularly less likely than other generations to say they 'have the opportunity to do what they do best' at work," Gallup said in the report. "This finding suggests that millennials may not be working in jobs that allow them to use their talents and strengths, thus creating disengagement."

Gallup noted that millennials are the most disengaged generation in the workforce. The reason is that when they come out of college, they land jobs that are not necessarily interested in, which could cause them to lack engagement.

With millennials and other generations not engaged as they could be, employers should look at what factors impact employee engagement. 

How to enhance employee engagement
According to Harvard Business Review, supervisors need to have honest discussions with their team members. A strong dialog between employees and management could be the big determinant in an engaged workforce. 

The key to connecting business leaders with employees might be better performance engagement, according to Deloitte. Companies should determine how they will not only manage employees, but also how they will measure and reward worker performance.

By giving feedback and offering incentives to boost output, employers are more likely to align business objectives with employee goals. In return for workers achieving the company's sales targets, the firm will provide compensation incentives that will increase their overall pay and reward them for their hard work.

To improve performance management, companies are increasingly employing key performance indicators, which help enhance managers' ability to assess employee work and output.

"New, agile models for performance management have arrived, and we see these new performance management models as a core component of this year's focus on engagement, development and leadership," Deloitte said in the report.

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Sathee Brent