The Business Case for Employee Voice

More than any of the other enablers of engagement, it is in terms of voice where the UK seems to struggle the most. The ETUI index of employee participation has the UK as second lowest – ahead of only Lithuania[1]. Evidence from WERS shows that just one in two employees (52 per cent) say that managers are good or very good at seeking their views. Fewer still – just one in three (32 per cent) – say that managers are good or very good at allowing employees to influence decision-making[2]. Yet the evidence is strong that voice can have a huge array of benefits for the employer as well as the employee.

Engagement, productivity and discretionary effort

It should come as no surprise that workers who feel they have a say at work, can put forward suggestions and have some discretion over their daily work tend to be more motivated and more productive. Voice has been directly associated with organisational commitment[3], as well as being identified as one of the four key determinants of employee engagement.[4] Engagement in turn is a key driver of productivity; in a survey of over 23,000 business units, Gallup found that those with engagement scores in the highest quartile were 18 per cent more productive than those in the lowest quartile[5].

Research from Eurofound across 24,000 European organisations has concluded that those which “used joint employee-management decision-making on daily tasks” and “have extensive practices for direct participation score best both in terms of company performance” across a range of metrics.[6] Meanwhile, according to a UK inquiry by the Smith Institute, listening (both individually and collectively) to what staff have to say was rated as the top factor that would improve the value of services or products produced by an organisation. However, just 14 per cent of employees thought management always listened to employee suggestions for improving productivity, while 26 per cent though they never did. As one respondent put it: “Our management do not listen to staff. Very, very simple, inexpensive and quick fixes would make a huge difference to productivity, but they just don’t seem to care.”[7]

Absenteeism, and turnover

Voice has also been directly associated with reduced absenteeism and reduced staff turnover, as a result both of higher commitment to the organisation, effectiveness of resolving problems that may otherwise have led to quitting and also genuine improvements in employee health and wellbeing that reduce the need for sickness absence.

According to a study by health and safety expert, Dr Dominic Cooper, engaged employees are five times less likely to be involved in an accident, and the costs of disengaged employees are about six times more for an incident than for an engaged employee. Research in the NHS found that one standard deviation increase in engagement was correlated with a 5% reduction in absenteeism, saving £200,000 in annual salary costs to an average acute NHS trust with 4,500 staff[8]. Research published by the DTI (now BEIS) in 2007 showed the role of union representatives leads to between 8,000 and 13,000 fewer work-related injuries and 3,000 to 8,000 fewer cases of illness per year, amounting in combination to up to 616,000 fewer working days lost[9].

The same research also found that workplace representatives led to 13,000 to 25,000 fewer dismissals and 17,000 to 34,000 fewer voluntary ‘exits’ per year, worth millions of pounds to employers in staff turnover. This accords with other academic research showing that employees with more voice at work were significantly less likely to quit.[10]

Creativity and innovation

Engaged employees are, unsurprisingly, more innovative; they seek to continuously improve processes, look for new ways of adding value to their work and are more likely to suggest and follow through on new ideas. In 2007 Gallup found that 59 per cent of the more engaged employees said that work brings out their most creative ideas, compared to just 3 per cent of the less engaged[11]. Workers at the frontline often have the best ideas for how the processes they engage with daily could be improved. Yet to make these improvements, they need a voice; a way of putting forward their ideas to the wider organisation and have them adopted – the Japanese management approach of Kaizen exemplified in the Toyota Way and embodied in many of our most productive businesses is precisely such a system. The IPA’s latest research into police forces in the UK has similarly found clear evidence that better voice structures are needed to enable bottom-up innovation, as well as supporting wider change management[12].

Economist Herbert Simon, commenting on the Hawthorne experiments in the 1920s, coined the “participation hypothesis – the hypothesis that significant changes in human behaviour can be brought about rapidly only if the persons who are expected to change participate in deciding what the change shall be and how it shall be made.”

Reputation and whistleblowing and recruitment

Another key benefit is in enabling employees to raise concerns early and head off potential scandals. Scandals across the NHS, banking, retail and care sectors in recent years all showed that there are always people within the organisation that knew what was going on. The common factor, however, was that none of these were listening organisations. People were either too afraid or too disengaged to speak up or felt that nobody was listening when they tried. In contrast, at Tesco in 2014 Dave Lewis as incoming CEO asked his employees to email him about their views and concerns. Among the 10,000 emails received were some which revealed to him what a small number of senior people had been doing to inflate their financial figures. A scandal which, if left unchecked could have bought the company down, was dealt with. It was long and painful – but worth it.

The biggest obstacles to recruitment are increasingly around organisational reputation – particularly in terms of poor leadership and dysfunctional teams.[13] Nearly half of employees would rule out joining a firm that showed those characteristics, regardless of the pay increase. A 10 per cent raise would only entice just over a quarter to join such a company. As a result, a company with 10,000 members of staff could be spending up to £5.3 million in additional wages to make up for a perceived bad reputation – in other words £3,282 per hire[14]

Other benefits

Another benefit of having a well-functioning employee voice mechanism is that it allows disputes between management and the workforce to be resolved in a timely and constructive manner, rather than allowing them to escalate into possible industrial action. Workplaces with functioning partnership agreements are far less likely to see days lost to strike action than similar workplaces without such agreements in place.

Finally there is increasing interest in benefits to cyber-security. A 2016 study of 874 data breaches found that less than 10 per cent were conducted by outsiders with stolen credentials – compared with 22 per cent caused by malicious employee activity and a shocking 65 per cent as a result of employee or contractor negligence[15]. A workforce that feels they are listened to by management in a respectful way are far more likely to report concerns about a colleague’s behaviour, potentially heading off a major security incident which could cost the organisation up to millions of pounds in damage.

Overall, having an employee voice system that is representative, covers meaningful issues, allows employees to be informed and provides representatives with suitable support and training, as well as ensuring their voice will be listened and responded to, is a win-win formula for any major employer, providing a whole array of clear benefits.

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[1] ETUI (2010). ‘The European Participation Index (EPI): A Tool for Cross-National Quantitative Comparison’

[2] Workplace Employment Relations Survey (2011)

[3] Forth, J. and Metcalf, H. (2014), ‘Young people’s experiences in the workplace’, Acas Research Paper

[4] MacLeod and Clarke (2009), ‘Engaging for Success’

[5] Harter et al (2012), ‘The relationship between engagement at work and organizational outcomes’

[6] Eurofound (2015), ‘Third European Company Survey – Overview report’

[7] The Smith Institute, (2015). ‘Making Work Better’

[8] Powell, M., Dawson, J. F., Topakas, A., Durose, J., & Fewtrell, C. (2014). Staff satisfaction and organisational performance: evidence from a longitudinal

secondary analysis of the NHS staff survey and outcome data. Health Services and Delivery Research, 2, 1‐336.

[9] DTI (2007). ‘Workplace representatives: A review of their facilities and facility time’

[10] Bryson, A., Freeman, R., Lucifora, C., Pellizzari, M and Perotin, V. (2013), ‘Paying for Performance: Incentive Pay Schemes and Employees' Financial Participation’

[11] Kruger and Killham (2007), ‘The Innovation Equation’

[12] IPA (2019), ‘Forces of Change’

[13] Harvard Business Review (March 2016)

[14] Clarke, N. (2016), ‘Improving manufacturing productivity through employee engagement - a report for the Business Productivity Leadership Group’

[15] Ponemon Institute (2016) ‘Costs of Insider Threats Report’