Better employee engagement could deliver £26bn GDP growth in the UK

Academics at the University of Bath have played a key role in a national report that shows the UK is missing out on the full capability of 20 million workers because they are not actively engaged with their jobs and their employers.

Dr Bruce Rayton, from the School of Management, is co-author of ‘The Evidence’ - a report which highlights that two thirds of UK workers surveyed feel they have “more to offer” at work.

The report’s findings were launched yesterday (November 12) by leaders from private, public and third sector organisations at the Department for Business, Innovation and Skills in London.

Dr Rayton’s report on the latest evidence about the effectiveness of employee engagement was commissioned by the nationwide ‘Engage for Success’ task force.

Dr Rayton said: “Engagement predicts future performance better than performance predicts future engagement. In particular, engagement predicts performance several years into the future.

“Engagement occupies a central role in "service profit chains", with employee engagement leading to improved customer satisfaction, customer loyalty and customer advocacy which in turn drives future sales, operating profits and other financial outcomes.

“Organisations need to look carefully at their own situations when deciding how best to engage employees. Organisational contexts will differ, as will employee wants and needs: one size does not fit all.”

An analysis of the evidence launched shows that:

  • Only around a third of UK employees say they are actively engaged at work, placing the UK ninth in engagement levels among the world’s 12 largest economies (Kenexa, 2009).
  • This represents some 20 million workers who are not delivering their full capability or realising their potential at work.
  • In a Populus survey (2012), 64% of people said they have more to offer in skills and talent than they are currently demonstrating or being asked to demonstrate at work (1)
  • Office of National Statistics data reveals that on an output per worker basis, UK productivity was 20 percentage points lower than the rest of the G7 in 2011 (2)
  • Even in turbulent economic times, organisations with high engagement levels outperformed the total stock market index and posted total shareholder returns that were higher than average in 2010 (3).

This independent, voluntary taskforce of chief executives and senior leaders was launched by the Prime Minister in March 2011 to further spread the ideas and messages which came from the publication of the ‘Engaging for Success’ report to Government in 2009.

Professor Veronica Hope-Hailey, also from the University’s School of Management, was the only academic member to sit on the steering group of the taskforce.

She is the author of the report, sponsored by the Chartered Institute of Personnel and Development "Where has all the trust gone?" which identified strategies whereby organisations can retain the trust of their workforce despite having to implement downsizing and restructuring. She has also researched engagement in emerging economies.

Professor Hope-Hailey said: “In the current economic climate there is a need for both organisational engagement as well as job engagement.

“The key is to understand that work engagement can drive productivity whilst organisational engagement can drive loyalty. So companies may choose to focus on one more than the other depending upon their context. In China it is about creating organisational engagement in multinationals as there is high mobility amongst skilled labour.”

Commenting on the launch, the Prime Minister David Cameron said: "Engage for Success is a movement that I helped launch last year to get UK workers more involved in the decision making of their companies and feel more passionate about their work.

"This meeting of leading companies and the publication of new evidence is an important step in achieving this and helping Britain to compete in the global race. With only a third of UK workers saying they feel engaged I encourage all companies to get involved in this important initiative." 

Also launched was a national website which is full of case studies, tools and techniques on how to better engage employees. The website is a free to use national resource which will help leaders and managers take practical action to engage their people.


(1) Populus survey of 2,049 GB adults, online, between the 26th and 28th October 2012, of whom 1,111 were employed either full or part time.

(2) Office for National Statistics, 'International Comparisons of Productivity, First Estimates for 2011' (2012)

(3) Aon Hewitt (2010)

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