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
Rentokil Initial plc has a 66,000 employee group, £2.5bn turnover with services ranging from pest control to parcel delivery. It is now looking for growth and to develop a reputation for excellence in customer care.
As a people based service organisation, Rentokil Initial’s service and business results depend heavily on how engaged their employees feel. Determined to extract more value from the company’s annual employee survey, they engaged Hay Group to find the connections between employee survey outcomes and business results.
A combination of correlation and gap analysis, based on 15 months of data, revealed a direct link between enablement (feeling able to ‘get the job done’), retention and gross margin. It also showed the importance of engagement in health and safety outcomes and retention of colleagues throughout the company, particularly for staff in sales roles.
Rentokil Initial’s employee survey, Your Voice Counts, provided a measure of employee engagement and pinpointed areas for improvement, generating up to 2,200 local action plans from branch to divisional level. To uncover any connections, Hay Group undertook linkage research that looked for relationships between the Your Voice Counts survey data and three sets of Rentokil KPIs: financial (including gross margin and revenue growth); employee data (specifically retention statistics for sales and service people); and customer data around service quality and customer retention.
Rentokil used a combination of correlation and gap analysis using 15 months of data, finding that those teams who went on to produce the best gross margin over the study period, began the period with engagement levels that were higher (5%) than the initial engagement levels of underperforming teams.
The study also showed that engagement plays a key retention role at Rentokil Initial, especially for sales employees, where a one percentage point improvement in engagement improves retention by 0.39%. The teams that improved engagement the most saw retention increase by 6.7 percentage points, providing estimated savings of £7 million.
While it may not be a direct financial KPI, the knock-on effects of poor health and safety in a business like Rentokil Initial have indirect costs through more lost man days and higher insurance costs. The study showed that units with poor safety records were less engaged (-4%) than those with good scores.
“In times when every penny counts, to have something which empirically links engagement and enablement with performance is very powerful. It takes away the guesswork and shows where to focus to maximise business performance”.
Malcolm Padley, Director of Corporate Communications, Rentokil Initial plc