Should small to mid-sized companies be measuring engagement?

Office workers at informal meeting

Most organizations with headcounts of over 2,000 employees measure engagement in one form or another. In fact, according to a study by The Engagement Institute (1), 8 of 10 HR executives say that their organization has a formal engagement program. What about smaller organizations? The anecdotal evidence would suggest that the practices around measuring and improving engagement are much more sporadic.

Budget constraints and lack of internal resources certainly create challenges, but perhaps the smaller size of these organizations creates a belief that “we know what is going on” and therefore, will know how to address engagement without formal measurement?

Mercer | Sirota has been studying engagement and employee satisfaction for over 45 years. We find many examples of improved engagement results leading to an increase in positive business outcomes. As you would expect, employees with the right talent, that care about what they do (committed, proud, and motivated) produce more for their organizations. We find these same patterns and linkages across organizations, regardless of size. And the reality is that 99% of all enterprises in the US employ fewer than 500 employees (2). There is a large percentage of the American workforce where engagement is not being measured consistently and thus fails to be fully understood. And if something is not being measured, it is very hard for it to be managed and improved.

Each year, Mercer | Sirota asks around 1 million employees how they feel about their work. 

When we look at the results by size of the organization, we see very little difference in responses to the question “I am motivated to go above and beyond what is normally expected of me at XYZ organization.” Recent data shows 36% of employees saying they “strongly agree” with the statement, 47% say they “agree” and 17% are either neutral or negative. However, when we dig into specific areas that influence engagement, we see some dramatic differences between organizations with more than 2,000 employees and those with fewer than that number.

First, employees in smaller organizations are much less favorable in terms of feeling their organization operates efficiently. Perhaps this is due to lack of formal processes or constrained resources. We also see data that suggests employees in smaller organizations are much less likely to feel there is a climate of trust where they work. 

This could be a symptom of lack of communication or uncertainty about the company or their job as things change. And finally, with smaller organizations that have done an engagement survey, there is there is considerably less confidence that the survey results will be used constructively as compared with larger organizations. Possibly due to a feeling that leadership is neither able nor fully equipped to effectively take action on engagement issues.

These data suggest that smaller organizations have very specific issues and needs as it relates to driving engagement. And each individual organization will have different areas of focus related to their strategy, the nature of their work and the challenges they face. The key is to understand what those issues are for your company and then work with your leaders, managers, and employees to continually address those barriers to engagement and performance.

Given their unique challenges, an engagement measurement and improvement program for small and mid-sized organizations needs to contain the following:

  • A valid, reliable way of measuring engagement and organizational performance
  • A fast, easy to implement, cost effective approach
  • User friendly tools to utilize the data
  • Guidance from an expert on your organizational priorities

Mercer | Sirota has leveraged our years of research in this space to develop a program that meets these criteria above. 


1. The Engagement Institute. The DNA of Engagement Report, 2014


Adam Pressman
by Adam Pressman

Business Leader US and Canada, Mercer Employee Research

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