Evidence Case Study: Serco (2)

The following case study was provided as part of the evidence for the effectiveness of employee engagement strategies in improving performance, productivity and, in the private sector profitability.  It has been used cumulatively with other submissions compiled by many leading companies and organisations to leave little room for doubt about the statistical importance of engaging employees.

This particular case study is an additional support to The Evidence Paper

Background:

Serco is a FTSE 100 international services company with more than 100,000 employees delivering services to government and private clients in over 30 countries. Clients include providers of public services like health, education, transport, science and defence.

Results:

Work by Serco and Aon Hewitt has demonstrated a longitudinal relationship between employee engagement and the “Net Promoter Score.”

Serco provided Aon with a Net Promoter Score (NPS) for 264 separate contracts in the UK and Europe in 2011. The net promoter score is a measure of customer loyalty where customers are asked to assess the likelihood that they would recommend the company to others. Those who score the question highly are classed as ‘promoters’, those who score the question poorly are classed as ‘detractors’, and those in between classed as ‘passives’. The NPS is constructed as a ratio of the difference between promoters and detractors divided by the total number of responses.

 

 

Aon segmented Serco’s contracts into groups based on the percentage of engaged employees identified in their 2011 survey of Serco employees, and in doing so revealed a useful number of contracts within each classification. Aon matched the survey data with the NPS scores and revealed a strong relationship between engagement and NPS. Contracts delivered by engaged employees showed much better customer loyalty than those with less engaged employees.

Table 1: Engagement and NPS in Serco (2011)

Percentage of engaged employees in 2011

Number of contracts

2011 Net Promoter Score

65% and over

24

33%

45-64%

42

5%

30-44%

40

-7%

Under 30%

27

-21%

 

Of the 133 contracts in Table 1, 90 had both a 2010 and 2011 employee engagement score, with 71 of these showing large changes in engagement over the year: changes in excess of 4% either direction. The 32 contracts that improved engagement by more than 4% had a 2011 NPS of 16%, compared to an NPS of -8% for those contracts with a decline in engagement of more than 4%.

Table 2: Changes in engagement and NPS in Serco (2010-2011)

Change in engagement

2010 – 2011

Number of contracts

2011 Net Promoter Score

Improved by at least 4%

32

16%

Declined by more than 4%

39

-8%

 

The contracts which improved employee engagement show a better aggregated 2011 customer NPS score compared to the customer NPS score of contracts which observed declines in employee engagement. This may indicate a link between improving employee engagement and subsequent impact on customer NPS.