Loyal Workers – As Important As Loyal Customers

How disengaged workers both increase costs and reduce revenue

By Brian Galonek

As competition swells in the gaming space, casinos have looked increasingly towards finding new revenue streams and expanding existing ones to boost the bottom line. These are necessary undertakings to be sure, as nothing trumps customer loyalty and its effects on profitability.

That having been said, there is another tactic that can also produce a substantially positive impact on the bottom line. This method can greatly improve the customer experience, and by doing so, generate more loyal, repeat customers who come more often and stay longer, and it has nothing to do with marketing (at least not external marketing).

The tactic of which I speak is “employee engagement” and it is the prized possession of informed companies and organizations that have discovered its enormous value (Disney probably being the best example). The challenge of improving engagement may seem daunting, but it is really just another way of saying that you need to improve the connection between the employer and employee. It is about focusing on the shared interests of both groups, and about making and keeping commitments to inspire trust.

Engagement is not about punishment, which most companies are already very well-equipped to dole out, but rather it involves deploying tools and processes to recognize and reward the good behaviors, and thereby eliminate the bad ones. Luckily, most companies already have many of these tools in place, such as new employee orientation processes, training programs, wellness initiatives, safety meetings, and employee communications systems, just to mention a few. These tools form the structure and the wiring that are essential to achieve higher levels of engagement; what is needed is the spark.

The real benefi ts of a highly engaged workforce often shock people. According to a comprehensive three-year study conducted by Towers Watson, companies with engaged employees grew 19%, while companies with disengaged employees declined by 30% during that same period. Below are some other stats from that same study. Organizations with higher-than-average employee engagement realize:

• 27% higher profits
• 50% higher customer loyalty
• 38% higher productivity
• 20% more revenue per employee
• 57% higher shareholder returns

These numbers may give you pause; I know I was amazed the first time that I saw them, but when you start to drill down on the effects of a disengaged workforce, you can easily see why the numbers are so severe. Disengaged workers both increase costs and reduce revenue. On the cost side, you can look no further than employee turnover, estimated to be as high as 80% in some casinos. Researchers have pegged the cost of losing a single employee at between $5,000, for less complex jobs, and as much as $12,000, for more complex jobs. These represent just the hard costs (advertising, HR staff , training, etc.), the soft costs (strain on other workers, disruption to operations, morale) are often two to four times higher. Crunch some numbers and you can quickly see that a casino with 2,000 employees and an annual turnover rate of 30% is staring at a multi-million dollar turnover expense.

On the revenue side, those disengaged employees can do a lot of damage before they quit or get fi red, or worse yet, if they remain employed. They are the ones that deliver inferior customer service both to internal and external customers, and by doing so reduce the customer loyalty that is so vitally important. How much does your casino lose every time poor customer service costs you a patron? Once you understand that disengaged employees drive expenses higher while reducing revenues, you must surely come to the conclusion that there is no more important issue to address; but how?

Most casinos will have many of the employee engagement tactics in place already; they usually are just underutilizing them. Recognition programs, wellness initiatives, safety rewards, suggestion programs, new employee orientations, training sessions, employee surveys, goal sharing, and a host of other common practices are all great venues to boost engagement levels. The problem for many casinos is that many of these initiatives are stale or underutilized.

So how can a casino turn these programs into a useful suite of engagement tools? For starters, they need to take a cue from their marketing departments. When a marketing department wants to launch a new campaign, they do so with creative thinking, skilled design, detailed execution, and extensive communications eff orts. The same is needed to better engage employees. Here are some tactics to accomplish this goal for your “internal customers” – your employees.

• Brand the Program – People respond to brand names, which is why the generic food section of any supermarket is so small. People trust brand names, and by adding one to your initiative, you will immediately capture the attention of your workers, who will see the eff ort as more sincere and not some off -the-shelf attempt at something new that required very little effort.

• Communicate – Take every opportunity to communicate your branded program to your workers so that they see the weight of the eff ort. Use printed materials, web pages, social networks, meetings, and any other opportunity to communicate with your employees to promote the values and benefits of the program.

• Make It Sincere – Make sure there is substance behind it. If it looks like “lipstick on a pig,” it will fall fl at and look like a halfhearted attempt to assuage employee concerns. It must have real benefi ts that are applied consistently and fairly to all participants. Treat your employees exactly like you expect them to treat your customers.

• Recognize and Reward – Lack of Recognition is often listed as the number one reason why people leave their jobs. Face-to-face recognition accompanied by an incentive program is one of the best ways to improve the connection points between the employer and employee, and to portray your new employee engagement program in the proper light.

• Involve the Employees – Don’t design and launch it in a vacuum. Create teams of employees from all departments to help give the program direction and make sure that everyone knows that the organization received input from a broad base of employees and departments.

• Find the Right Partner – An undertaking of this size requires outside expertise to be done right. Use a partner with a proven track record of understanding both the gaming industry and the power of employee engagement.