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From the Desk of Jack Healy

Research: Employee Engagement, Competitive Advantage, and Financial Success

Jack Healy – The voice of manufacturing in Massachusetts
Jack Healy –
The Voice of Manufacturing in Massachusetts

By Jack Healy, Director of Operations, MassMEP [email protected]

As every reader knows, there has been a heavy and prolonged effort throughout the manufacturing sector to address the lack of skills within the available labor pool. Indeed, the recent Manufacturing Day on October 4, 2023 was the most advertised manufacturing event of the entire year. The level of participation, twice that of the previous year, reflected the acuteness of the current skills gap and the need for action. Unfortunately, this sense of urgency does not appear to translate to the existing workforce. A recent Gallup Poll indicates that only three out of ten of U.S. workers are fully engaged in their workplace.

The Gallup report, "State of the American Workplace: Employee Engagement Insights for U.S. Business Leaders," found that since the financial meltdown of 2008 and the recession that followed, the American workforce has struggled to adapt to the uncertain economic future that seems to still be with us. According to the report, "By the end of 2012, as the U.S. inched towards a market recovery, only 30% of American workers were engaged, or involved in, enthusiastic about, and committed to their workplace." While this figure matched the all-time high since Gallup began tracking the U.S. working population’s engagement levels, it shows that 70% of American workers are not showing up for work committed to delivering their best performance. From the report,

Of the 70% of American workers who are not reaching their full potential, 52% are not engaged, and another 18% are actively disengaged. These employees are emotionally disconnected from their companies and may be actually working against their employee’s interests. They are less productive, are more likely to steal from their companies, negatively influence their co-workers, miss work days and drive customers away.

Gallup estimates that actively disengaged employees cost the U.S. $450 billion to $550 billion in loss productivity per year.

While this is certainly disappointing, the report indicates that there is a silver lining for any company that gets "engagement" right.

Gallup’s extensive research shows that engagement, as measured by Gallup’s Q12 employee engagement survey, is strongly connected to business outcomes essential to an organizations financial success, including productivity, profitability and customer engagement.

Employee Engagement at Jabil / Nypro
The benefits of employee engagement are readily acknowledged in the performance of Jabil, a supply chain management and electronics manufacturer that recently acquired Nypro, headquartered in Clinton, Massachusetts. Jabil states right up front on their web site that it is "built on a foundation of empowered employees in over 60 plants in 33 countries."

Jabil’s annual report points out that their continuous improvement efforts were focused on educating their global workforce to reduce waste and increase efficiencies. Given the result of over 32,000 Jabil Kaizens successfully completed in 2012 vs. 15,000 plus successfully completed in 2011, their focus on educating their employees has apparently worked out very well.  Jabil, with $18.3 billion dollars in sales and a 20% plus return on invested capital, is not likely to lose its focus on engaging employees.

This same opportunity for employee engagement is open to all companies, regardless of size and sector. Real change happens at the working group level, but can only happen when management sets the tone and educates their workforce to support the objective. If you have a typical business where you have more employees in the wagon then pulling the wagon, you may want to consider utilizing the same system of employee engagement through continuous improvement that all of the competitive manufacturers utilize.

Most manufacturing enterprises are small enough that just a handful of properly constructed Kaizens can make all the difference to the organization’s competitiveness. Unfortunately, Kaizens that are not executed well because of poor planning or a lack of adequate training, will promote the opposite effect — lost opportunities and employee disengagement.

Manufacturing costs are most increased by the people who touch the product. Engaging those people is a competitive advantage as most of your competitors are in the group where 70% of their workforce is disengaged. Now is the time to engage!


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