A current political theme in the United States today is job creation for American workers. I am all for this, but simply adding jobs is not enough. Manipulating international trade and taxes might increase some jobs domestically, but it doesn’t help to create additional value overall. Without additional value creation, any moves we make result in a zero-sum gain at best.
Imagine the entire United States was one big company. And imagine that our big company has approximately 125 million employees (which, according to the US Census, is the number of full-time employees as of year-end 2017 working 35 hours or more per week). That means out of a US population of approximately 325 million, just under 40% are generating all of the revenue, GDP and value for the country in an increasingly global economy. Now assume a ratio of one manager to every ten employees. This would mean that within our big company (country) there are about 12.5 million supervisors and 1.3 million managers responsible for developing and optimizing the performance of our 125 million employees.
In his book, The Coming Jobs War, Jim Clifton, Chairman and CEO of Gallup, states “Gallup has determined that 28% of the American workforce is “engaged,” another 53% is “not engaged,” and a staggering 19% is “actively disengaged.”
The 53% (roughly 66 million American workers) of not engaged workers are not hostile or disruptive, and they are not troublemakers. They are just there, killing time and earning a paycheck. They have little regard or concern for customers, productivity, profitability, waste, safety, mission or purpose. They do what is required to remain employed and could be lured away easily by a slightly better offer elsewhere.
The 28% (roughly 35 million American workers) of engaged employees are the best colleagues; usually the creative force behind everything good that happens in a company. Most importantly, these employees are the only people who create new customers and retain existing customers.
The 19% (roughly 24 million American workers) of actively disengaged employees are there to dismantle and destroy our company. They exhaust managers, have more on-the-job-accidents, they are sicker, they miss more days and quit at a higher rate than other employees. Whatever engaged employees are trying to accomplish, these employees are actively trying to undo. And worse, actively disengaged employees are constantly trying to recruit others within our company to their point of view. The only thing worse than an actively disengaged employee who quits and leaves, is one who quits and stays.
If we apply a filter of only being concerned with actively engaged employees, we can now see that only 35 million actively engaged full time workers out of a population of 325 million are driving the US economy. This means that our global competitiveness, innovation, value creation and employee growth are in the hands of just over 10% of the population.
The single greatest contribution we can make to job creation and prosperity is to increase the number of actively engaged employees across the country. Engaged customers come from engaged employees. Engaged employees come from great managers. Deloitte found that for every 1% increase in engagement, there is a corresponding increase of 0.6% revenue. If a company earning $500 million in annual revenue increased its engagement by just 1%, that company would add another $3 million to the bottom line.
Company executives agree that developing leaders is critical, however research shows about 61 percent of companies offer no leadership training. Having served on several executive teams and consulted with many more, I know most executives intuitively know that great leadership is vital for organizational success. However, in almost all organizations there is a lack of urgency to improve leadership skills driven by a belief that an organization’s current leadership capacity — and subsequent performance — is good enough. But is it? Many managers I counsel and coach complain they are too busy to develop employees. Simply put, these managers are too busy to manage.
A sustainable growth strategy includes an invested focus on leadership and management development. We must ensure we have only the best managers occupying the 1.3 million management roles in our country. If we won’t do it for our country, we should at least do it for our company.